Our opinion on the current state of MSP

MAS Real Estate Inc. (MSP), a Real Estate Investment Trust (REIT) with a focus on the European and UK property markets, has established itself as a significant player in the real estate sector. Founded by Martin Slabbert and Victor Semionov, who are renowned for their expertise in European property and their successful venture with NEPI Rockcastle, MAS operates with a strategy aimed at restructuring and growing its balance sheet. This strategy involves divesting properties in Western Europe to acquire income-generating assets with promising growth potential in Central and Eastern Europe (CEE), a move that has effectively tripled the size of its asset base since 2016.

For the six-month period ending 31st December 2023, MAS reported a 6% increase in adjusted distributable earnings and a notable 10% rise in tangible net asset value (NAV) to 1.60 euros per share. This positive performance is attributed to the exceptional operational achievements of its standing retail properties in CEE, characterized by increases in passing Net Rental Income (NRI) and enhanced asset valuations. These results were bolstered by strong rental and service charge collections and the impactful opening of the Carolina Mall on 31st August 2023. With a loan-to-value (LTV) ratio of 24.3% and a collection rate of 99.6%, MAS demonstrates financial stability and operational efficiency.

MAS is considered one of the more promising REITs listed on the Johannesburg Stock Exchange (JSE), particularly for investors looking to engage with the expanding European property sector. Its performance as a rand-hedge investment and its trading position well below net asset value (NAV) further enhance its appeal. The substantial investment by the Oppenheimer family, reported by Business Day on 25th January 2021, amounting to approximately R500m, underscores the confidence in MAS's strategic direction and future prospects.

The ongoing Ukraine crisis represents an external factor with potential implications for MAS and the broader European property market. However, the resolution of this crisis is anticipated to facilitate a rapid recovery for MAS shares, suggesting a robust outlook for the company in a post-crisis environment. This assessment positions MAS as an attractive investment opportunity for those looking to diversify their portfolio with a solid property stock in the dynamic European real estate market.