Listed property group, Accelerate Property Fund (APF) says it will sell its Cherry Lane Shopping Centre for R57 million, following a sale agreement with QSPACE.
The property, a retail building located at 471 Fehrson Street, Nieuw Muckleneuk Township, near Brooklyn Mall in Pretoria forms part of Accelerate’s retail portfolio
At the end of September 2023, the mall was valued at R65 million, but its value has since dropped to approximately R60 million as of March 2024.
APF had previously attempted to sell the mall for R65 million in 2023 when it was valued at around R70 million, but the deal fell through. Another attempt in March 2023 also failed.
Accelerate said it intends to apply the full proceeds from the sale to the reduction of debt and capital reinvestment into its core property portfolio.
"This decision aligns with Accelerate's ongoing efforts to review its assets and ensure they are in line with the company's current business strategy and growth plans," it said.
The transaction is subject to an agent's commission of R1,140,000 (plus VAT), payable to Platinum Hill Property Advisors.
Accelerate, a 50% owner of Fourways Mall, is proceeding with a R400 million rights offer to raise funds from shareholders to stabilise its finances and refocus on its core operations. This strategy includes renewed attention on Fourways Mall, implementing improvements through a strategic asset manager to attract more traffic to the retail centre.
Information Relating to the Property
The details of the Cherry Lane Shopping Centre, including location, gross lettable area (GLA), net rent, remaining lease term, and independent valuation, are as follows:
Description | For the year to 31 March 2023 | For the six months to 30 September 2023 |
GLA (m²): | 11,429m² | 11,429m² |
Weighted average rent per m²: | R68,92/m² | R56,42/m² |
Vacancy: | 32.3% | 47.8% |
Net property income: | R4.48 million | R2.10 million |
Weighted average lease expiry: | 0.54 years | 0.55 years |
These figures do not account for a new 10-year lease signed with Builders Warehouse, which will occupy 2,700m² of vacant space starting Q3 2024.
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