Accelerate Property Fund delivers impressive results for the year ended 31 March 2015

Posted On Monday, 22 June 2015 11:48 Published by
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Accelerate Property Fund, the JSE listed Real Estate Investment Trust with significant exposure in the dynamic Fourways node, Johannesburg, continued to deliver impressive results for the year ended 31 March 2015. 

AndrewCosta

Accelerate continues to impress

  • 47.7% Return on Equity for year under review (including current distribution)
  • Total distribution of 49,21 cents per share
  • Revenue of R748,8 million
  • HEPS of 54,65 cents
  • Distributable earnings of R303 million
  • Launch of oversubscribed Domestic Medium Term Note Programme
  • Existing Swap Maturities extended by approximately two years

Total distribution per share of 49.21 cents was reported, delivering on the market’s expectations and in line with prior guidance. “Our total return for the year of 47.7% positions Accelerate as one of the leading performers in a highly competitive market” commented Andrew Costa, Chief Operating Officer of the Fund. 

Accelerate continued its focus on optimising its portfolio and on prudent cost and capital management during the year under review. The cost-to-income ratio was further reduced from 18.6% to 13.44% reported for the year under review.  Retail vacancies remained fairly constant during the year, with office vacancies decreasing significantly from 18.1% to 11.72% for the year. Accelerate reported that the vacancy across the portfolio improved to 8.8%. 

 Short-term debt of R358 million was successfully refinanced and the Fund remains conservative having fixed 87.7% of its total debt at a blended interest rate of 7.35%. Post year-end, the swap maturity profiles were extended to 31 March 2019 from July/October 2017. “We have currently hedged 87.7% of our debt over a weighted average term of 2.2 years to mitigate an expected cycle of interest rate increases in the domestic market. During the year under review, we successfully reduced our loan to value ratio from 38.8% to 35.04%, providing further headroom for expected growth” commented Costa.

During the reporting period Accelerate received approval from the JSE for its R5 billion Domestic Medium Term Note (“DMTN”) programme. A senior secured rating of AA-(za) and senior unsecured rating of BBB+(za) from Global Credit Ratings Fund (GCR) was achieved. The first issuance was in September 2014 and was oversubscribed. (An important milestone in further diversifying Accelerate’s funding base.) In total R701 million of debt was raised via the capital markets in the year under review.

Post the reporting period, Accelerate acquired the property holding companies for six properties currently tenanted by KPMG Inc. and KPMG Services. The purchase consideration of R850 million was fully funded through a debt package.

“KPMG is an exceptional counterparty to transact with. Their blue chip status, combined with a 15 year lease at a yield of 8% provides a defensive underpin to our portfolio. “Although our focus remains squarely on retail, we saw a unique opportunity to acquire another quality, strategic portfolio” Costa explained.

The assets include the iconic KPMG Crescent and sky bridge off Jan Smuts Avenue as well as Wanooka Place in Parktown, and other regional A-grade offices also tenanted by KPMG. “Accelerate’s primary focus remains the Fourways Mall development and refurbishment which will result in the creation of a much anticipated super-regional centre in the dynamic Fourways node. In addition there are various strategic acquisitions as well as organic growth opportunities that we are actively considering,” concluded Costa. 

Last modified on Monday, 22 June 2015 12:29

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