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MAS Real Estate reaps fruits of aggressive acquisition strategy

Western Europe-focused MAS Real Estate‚ which released results for the six months to December on Monday‚ has grown its portfolio substantially after its listing on the JSE main board in December...
MAS Real Estate CEO Lukas Nakos. Image credit: Financial Mail
MAS Real Estate CEO Lukas Nakos. Image credit: Financial Mail

After an aggressive acquisition strategy‚ the portfolio grew 137% from €64.8m to €153.7m (R2bn) during the reporting period.

The spurt in the growth of the property portfolio came after a private placement in February last year in which MAS raised the equivalent of €180m from investors.

During the reporting period it also acquired a portfolio of business and retail parks‚ as well as a 19ha industrial warehousing and office park in the UK.

Its largest single investment to date‚ the warehousing and office complex was bought for about €40m.

All these acquisitions were income-producing‚ and in almost all instances the properties were bought for cash. Long-term leases were secured with the existing tenants.

MAS's investment drive was expected to show further growth in net asset value in the second half of the June financial year.

"MAS is an interesting proposition. They have support from the large shareholding Attacq has in the company; they are busy with some exciting developments and there is tangible upside that is not yet reflected on the balance sheet‚" said Evan Robins‚ a portfolio manager at Old Mutual Investment Group.

This was because many of the group's recent acquisitions were made towards the end of or after the reporting period.

MD Lukas Nakos said on Monday that the company remained confident of achieving its target of a 6% core income yield on capital invested by shareholders by December 2016. "This translates into a core income run-rate per share of above 6.2 euro cents‚" he said.

Currently the company is yielding nearly 2% income yield on an annualised basis.

MAS owns properties in Germany‚ Switzerland and the UK. It is also listed on the Euro MTF market of the Luxembourg Bourse.

It changed its financial year-end from 28 February to 30 June during the reporting period‚ to align it with that of its major shareholder‚ Attacq.

The group's net asset value rose from €107.1m in the corresponding period to €319.1m.

A distribution of €0.0115 per share was proposed.

Nakos said the company's other property-related investments had also performed well. "Our investment in the Karoo fund‚ acquired in October 2013 from Attacq for €34.2m‚ has since gained €19.5m in value."

He said in the short-term‚ the company would focus on raising debt on a number of its new assets to benefit from the current low interest rate environment in the eurozone.

Source: BDpro


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