MAS acquires R1bn German shopping centre
The JSE-listed company is aggressively acquiring assets to in northern Germany to drive income growth
MAS Real Estate, which is aggressively buying assets to drive its income growth, has acquired a shopping centre in Flensburg, northern Germany, in a deal worth nearly R1bn.
This means the company, which acts as a currency hedge for South African investors as it pays dividends in euros, had grown its asset base to more than R19bn.
MAS’s CFO and co-founder Malcolm Levy said the European-focused property counter was on track to deliver euro dividend growth in the double digits for its 2019 financial year, making it one of the most attractive offshore property stocks for JSE investors.
Levy said MAS would spend €62.55m on its latest acquisition, the 25,540m² Flensburg Galerie, a popular shopping centre located near the Danish border.
The mall includes a number of blue chip tenants on long leases, meaning the company has secured a regular stream of income from the asset, he said.
MAS would also be able to enhance returns from the asset as it had vacancies for which the fund had potential tenants. There were also opportunities to add or convert sections of the mall, located in a prime area .
“The centre has direct access to the prime shopping street Holm and houses one of the main car parks serving the city centre,” said Levy. “With a catchment area of 500,000 people within a 45-minute drive, the shopping centre is well-established in a strong retail location with solid anchor and fashion tenants.
“The asset provides an ideal opportunity for significant value to be unlocked through active asset management and we are excited about the substantial interest already received from a number of potential tenants,” he said.
MAS increased its dividend 30% for the year to June 2018. Levy said the group’s strategy, which had seen it add assets to its portfolio at a relatively rapid pace, would enable it to achieve similar growth in the June 2019 financial year.
About 60% of MAS’s annual revenue is generated in western Europe, where the group has a footprint in Switzerland and Germany. The other 40% is generated from MAS’s PKM Developments, a joint venture with eastern Europe-focused Prime Kapital. It has co-invested with the firm in a number of assets located in countries such as Bulgaria, Romania and Poland.