Investors likely to put Accelerate Property Fund on buying list

Posted On Monday, 13 July 2015 10:20 Published by
Rate this item
(0 votes)

More investors are likely to place Accelerate Property Fund on their buying lists after the company finally acquired the rights to add another 90000m² to Fourways Mall.

Andrew Costa

The deal is worth R730m and will take the fund’s flagship Johannesburg property to a huge 170000m². That will make Fourways Mall SA’s largest centre, pipping Old Mutual’s 155000m² Gateway in Umhlanga.

Unlike some of its newer peers, Accelerate has underperformed the sector since the Georgiou-family founded fund listed in December 2013. At the time, management revealed ambitious plans to redevelop the mall but the market has been waiting for details on timing, pricing and funding.

Now that there is more certainty on the extension of Fourways Mall, the Accelerate story becomes “far more compelling’’, says Keillen Ndlovu, Stanlib’s head of listed property funds. “Most of the fund’s future upside lies in the centre’s redevelopment, so last week’s announcement should act as a catalyst for a rerating.’’

Accelerate COO Andrew Costa says given how the deal is structured, Accelerate will own 50% of the redeveloped mall with developers Fourways Precinct and Azrapart.

The redevelopment will incorporate nearby Fourways View centre on the corner of Witkoppen and Cedar roads as well as the Game building adjacent to the taxi parking area. Costa says the extension should increase the value of Fourways Mall to at least R6,56bn, up from R2,3bn.

Costa is confident there is enough demand from retailers and shoppers to justify an addition of this magnitude. “Retailers have already committed to take up 70% of the 90000m² extension.

These are mostly existing tenants who want to extend stores and bring in more brands, as well as a number of international retailers who couldn’t previously be accommodated at Fouways Mall due to a lack of space.’’Construction, scheduled to start by September, should be completed by October 2017.

Accelerate’s share price is up nearly 10% since mid-June. The stock is, however, still trading at a forward yield of 8%, which is attractive compared to the sector’s average 6,7%.

source: Financial Mail 

Last modified on Monday, 13 July 2015 20:46

Most Popular

Mall of Africa Celebrates Launch of New Generation Pick n Pay Store

Sep 23, 2019
Today Mall of Africa welcomed one of South Africa's biggest grocery retailers to the…

Exemplar REITail Acquires Katale Square Shopping Centre

Sep 23, 2019
Real estate investment trust, Exemplar REITail, has acquired Katale Square shopping…

City of Joburg Housing Development wins UN award

Sep 17, 2019
The City of Johannesburg’s Housing department has won a Sustainable Cities and Human…

Mixed-use is the key to funding hotel development in Africa

Sep 17, 2019
JLL’s research into global property transactions reveals that in the first half of 2019,…

Grit Real Estate financial results for the year-ended 30 June 2019

Sep 30, 2019
London Stock Exchange listed Grit, the only listed Africa-focused income distribution…

Please publish modules in offcanvas position.