Accelerate Property Fund is a listed Real Estate Investment Trust (REIT) says it has entered into a sale of letting enterprise agreement with Penalten Investments, a subsidiary of Cavaleros Group Holdings, to dispose of its stake in the Portside office tower located in Cape Town CBD.
The transaction is valued at R580 million and forms part of Accelerate’s ongoing strategic repositioning and restructuring efforts.
Situated in a prime location and comprising a full city block, bordered by Buitengracht, Hans Strijdom, Bree and Mechau Streets, Portside capitalises on the views of Table Mountain and the Atlantic Ocean.
Portside is rated by the Green Building Council of South Africa as the country’s only 5-star green tall building.
The agreement entails the sale of Accelerate’s proportionate ownership in the Portside office tower, which includes the ground floor retail area, office floors 9-18, 623 parking bays, and related common areas.
The deal is subject to Accelerate shareholder approval, as well as unconditional approval from the Competition Authority. There is no sales commission payable on the transaction by Accelerate.
This sale is in line with Accelerate’s broader strategy to restructure its portfolio and reduce debt. The proceeds from the sale will be directed toward debt reduction, strengthening the company’s financial position and supporting its strategic objectives for the future.
The Portside office tower, located in Cape Town’s Central Business District, is a notable asset in Accelerate’s portfolio. Key details of the property include:
Property Name: Portside Office Tower
Sector: Office
Weighted Average Gross Rental: R168 per square meter
Gross Lettable Area (GLA): 25,253 square meters
Valuation: R608.85 million (as of September 30, 2024)
The property has a strong rental income base and is well-positioned in a prime location within Cape Town’s business district. The directors’ valuation, based on cash flows and net income projections as of September 2024, is in line with the market’s expectations.
The net expected cash proceeds from the sale amount to approximately R580 million, which will contribute significantly to reducing the company’s debt. Additionally, the property generated a net operating income of approximately R22.7 million for the six months ending September 30, 2024, Accelerate said.
