Our opinion on the current state of MAS(MSP)MAS (MSP) is a real estate investment trust (REIT) that invests in office, commercial, logistics, retail, and hospitality properties in Europe and the UK. This REIT was started by Martin Slabbert and Victor Semionov, who are well known for establishing NEPI - which merged with Rockcastle. They are highly regarded as European property experts.
The company is involved in a program to "restructure and grow" its balance sheet. This is being done by selling properties in Western Europe and buying income-generating properties with good growth potential in Central and Eastern Europe (CEE). The company has tripled the size of its asset base since 2016.
In its results for the six months to 31st December 2023, the company reported adjusted distributable earnings up 6% and tangible net asset value (NAV) up 10% at 1.60 euros per share. This performance was due to, "...standing retail properties' exceptional operational performance in CEE, leading to increases in passing NRI and improved asset valuations, enhanced by excellent rental and service charge collections, as well as the positive effect of DJV opening Carolina Mall on 31 August 2023." The company had a loan-to-value (LTV) of 24.3% and a collection rate of 99.6%.
In a pre-close update on 31st May 2024, the company said, "Overall, like-for-like ('LFL') footfall for the four months to 30 April 2024 was 5% above the same period in 2023, and tenants' sales per m2 exceeded prior year levels by 6%, both in enclosed malls and in open-air malls."
In our view, this is one of the better REITs on the JSE and well worth looking at if you want to buy a property stock in the rapidly expanding European property sector. Obviously, it is a rand-hedge, and it is trading well below its net asset value (NAV). On 25th January 2021, Business Day reported that the Oppenheimer family had acquired a substantial stake in MSP for approximately R500 million. When and if the Ukraine crisis is resolved, we see this share recovering rapidly.
