May 8 2024 21:00
Embattled JSE-listed group Accelerate Property Fund which owns half of Fourways mall and private group Azrapart which owns the other half, are pushing their R1bn interruption of business claim against numerous insurers over lockdown restrictions during the Covid-19 pandemic. Accelerate’s Fourways Mall and other assets had been unable to operate optimally during lockdown, especially when the restrictions were at their most severe.
With a gross lettable area of 178,000m2 and more than 350 stores, Fourways Mall is the largest shopping centre in Africa. it underwent a large redevelopment in 2018 and 2019, nearly tripling in size, from 64,000m2 to 178,000m2. But the mall has battled to settle into all of its changws and is now struggling with numerous vacancies.
Accelerate and Azrapart are taking AIG SA, Bryte Insurance, Guardrisk and Old Mutual Insure to court demanding they collectively pay the two parties R1bn.
AIG holds 70% of the risk associated with Fourways Mall, while Old Mutual Insure has 14%, Bryte 8% and Guardrisk also 8%.
Accelerate and Azrapart have told the court that the insurance companies had indemnified Fourways Mall against business interruption, which included loss caused by infectious and contagious diseases.
But the insurance companies argue that the mall was not covered for infectious and contagious diseases. The High Court in Johannesburg ordered last Friday that the three main issues in dispute be separated.
Accelerate is trying to raise R200m from shareholders via a rights offer, which it wants to use to pay off debt and to recapitalise Fourways Mall.
Accelerate also owns the Portside development and the Buzz Shopping Centre and Cedar Square Shopping Centre which are both in Fourways. iGroup effectively owns 31.07% of Accelerate, making it the largest shareholder in the real estate investment trust.
alistair@propertyflash.co.za
