Accelerate Property Fund said in a pre-close operational update that it is in the middle of a restructuring plan to realign the fund for future growth.
As part of these efforts since August 2024, the fund has implemented a R300 million rights offer. This comprises a completed R200 million offer and a further R100 million rights offer currently under consideration.
Additionally, Accelerate said it has divested approximately R1.9 billion worth of non-strategic assets to reduce its debt burden. The funds will be used to finance additional capital expenditure at Fourways Mall and cover working capital needs.
The restructuring, expected to be completed by 31 March 2026, will leave Accelerate with a smaller, premium retail-oriented portfolio, it said. The focus will then shift towards optimising the value of key assets.
Accelerate’s immediate focus is the conclusion of a R100 million fully underwritten rights offer by 30 June 2025. This will supplement the previous R200 million rights offer concluded in June 2024.
The Fund has also made significant progress in its property disposal strategy. During the year under review, six assets were sold for a total of R704 million.
In addition, R1.2 billion worth of ongoing asset sales remains in progress, with R148.2 million of these sales expected to transfer shortly after 31 March 2025.
The proceeds from these disposals are being used to reduce debt, which is expected to positively impact the Fund’s loan-to-value (LTV) and interest cover ratios.
Fourways Mall, a major asset co-owned by Accelerate, has shown a strong recovery in trading, it said. The mall experienced significant gains in leasing, foot traffic, and overall retail performance, closing the 2024 calendar year with a 9.5% increase in total spend compared to the previous year.
The festive season trade highlighted renewed consumer confidence and retailer success.
Flanagan & Gerard, along with Moolman Group, played a key role in lease renewals, attracting new tenants and shoppers.
A total of 121 leases were renewed, covering 46,972 square meters of gross lettable area (GLA), with an average lease term of 4.2 years. As a result, vacancies at the mall have reduced from 19% in the prior year to 13.4%.
Approximately R144 million has been invested in capital expenditure at Fourways Mall, focusing on enhancing the overall shopping experience, including upgrades to lighting, signage, security, and wayfinding.
The mall’s planned future developments include a 50,000 square metre roof structure on the upper-level parking deck and the installation of a 6MW solar plant, valued at R222.4 million.
Accelerate has made notable strides in debt reduction, with interest-bearing borrowings decreasing by R700 million, from R4.4 billion as of 31 March 2024 to R3.7 billion currently.
This reduction has been achieved through asset disposals and proceeds from the R200 million rights offer.
Furthermore, the fund’s entire debt book will be renewed for two years, extending to 31 March 2027, reflecting strong support from its financial backers.
Looking ahead, Accelerate is focused on completing its restructuring efforts, with the goal of maintaining a Loan-to-Value (LTV) ratio of below 40% and improving its Interest Cover Ratio (ICR) to 1.6 times by the end of the process.
