Commenting on the results, Andrew Costa, Chief Operating Officer of Accelerate, said: “Our core portfolio performed well in a challenging economic and socio-political environment in South Africa, while our offshore portfolio performed well above expectations, and is the foundation of a solid scalable international platform.
“The 2018 year was a year of consolidation, with the Fund focusing on balance sheet optimisation, managing costs as well as enhancing the quality of our property portfolio, ensuring long term sustainability“ adds Costa
Accelerate’s nodal strategy remains a key differentiator within the local market. The strategy enables economies of scale within these nodes where any investment in improving specific properties, infrastructure or services benefits other properties owned by Accelerate in the same area.
The Fourways Mall redevelopment remains the key focus for the Fund and the node around this property continues to demonstrate impressive economic fundamentals and potential.
The Mall’s on-trend focus on shoppertainment to increase dwell time and expand the catchment area includes the flagship 4 500m² BOUNCE trampoline world, a latest spec 1 350m² Fun Company and a revamped fast food and quick service restaurant court. Development of KidZania, an internationally renowned children’s edutainment offering, is on track for opening later in 2018, adding further appeal to visitors from across the province and beyond.
The super-regional development of approximately 178 000 m² is currently 93% pre let with offers received on the remaining space. The redevelopment is nearing completion, with a phased opening due to begin at the end of this year.
“We are very excited about the Fourways Mall redevelopment, which will have transformed into a super-regional centre by its official reopening. Its top-quality retail tenant mix, residential densities, along with the broader development of the node is set to make Fourways the most dominant and valuable retail market in South Africa,” said Michael Georgiou, Chief Executive Officer of Accelerate.
Despite the tough economic environment, lease escalations remain strong at 7,7% locally, while the weighted average lease expiry remained defensive at 5,5 years for the total portfolio. However, vacancies across the portfolio increased from 7% to 10% due to subdued market conditions, especially in the office sector, but the continued focus on tenant optimisation and retention to protect Accelerate’s income stream is showing positive signs, with retail vacancies, which constitutes the core of the Accelerate business, having reduced from 8% to 5,5%.
The property value of the portfolio increased from R11,6 billion to R12,3 billion during the reporting period, reflecting the quality portfolio underpinning the fund.
The Fund’s European portfolio, predominantly in Austria, yielded a weighted average tenant turnover growth of 10.1% and was independently valued at €91,5 million, up from €82 million on acquisition in December 2016.The offshore portfolio comprises 8.3% of the Fund’s total revenue, and provides diversification to hard currency.
“The underlying core of both Accelerate’s South African and offshore portfolios remains solid and we will continue to focus on extracting optimal value from our chosen nodes. Given this focus, the Fund remains well positioned for the future” Costa said.