Accelerate Property Fund continues to decelerate

Accelerate Property Fund (APF), the listed real estate investment trust (Reit) has hit another snag with it no longer proceeding with the sale of Cherry Lane Shopping Centre in Pretoria, with the deal being called off for the third time in a year.

In June, the group announced that it would sell the Cherry Lane Shopping Centre for R57m.

The centre is located in Brooklyn Circle in Pretoria, near Brooklyn Mall, which is owned by Growthpoint Properties.

The mall was acquired by Accelerate in 2013 and valued at around R60m at the end of March 2024.

Shareholders have been advised that the disposal of the Property to QSPACE Limited will longer proceed, and the agreement has been terminated.

This is not the first time that Accelerate has had trouble selling the mall. It previously tried to sell the centre for R65m in 2023, valued at around R70m. It tried again in March 2024, but that deal also fell through.

The group previously said that the proceeds of the sale would be used to reduce its debt and reinvest in its core property portfolio. Accelerate is struggling with debt with its key centre, Fourways Mall having battled with large vacancies following a multi-billion Rand upgrade. the group also failed to make profits in eastern Europe.

“This decision was made as part of Accelerate’s ongoing efforts to review its assets and ensure that they align with the company’s current business strategy and growth plans,” Accelerate said in June.

Accelerate is the co-owner of South Africa’s biggest mall, Fourways Mall, with Azrapart.

Its latest results for the six months ended 30 September 2023 show that the group’s vacancies at the mall increased from 14,349 sqm in March 2023 to 15,109 sqm.

Like Cherry Lane, Fourways Mall’s fair value has also declined over the year, with Accelarate’s 50% shareholding value dropping from R4.8bn in 2020 to R4.02bn three years later.

This puts Fourways’ fair value at just over R8bn from close to R9.6bn before.

The group has announced a R200m rights offer to raise capital from shareholders.