Accelerate to sell motor retail building in Fourways for R80m

JSE-listed Accelerate Property Fund is selling the Ford Fourways building — a motor retail property — for R80m at a yield of 8.9% to lessee Hatfield Property Holdings.

The property, situated close to The Buzz Shopping Centre in Fourways, forms part of the company’s retail portfolio and was acquired in December 2013.

At end-January, the property was valued at R87.1m. Accelerate intends using the full sale proceeds to pay off debt and/or reinvest the funds into its portfolio, the company said in a statement on Thursday.

The building measuring 2,469m² has a remaining lease term of 3.2 years, with net rent of R245.52/m².

Accelerate said the disposal aligns with the company’s strategy of optimising its property assets and growth plans.

“While this decision was not taken lightly, we believe that it is in the best interest of the company and its shareholders.”

The transaction is expected to be completed in March once the buyer has fulfilled sale conditions including obtaining a loan.

Accelerate is a diversified real estate investment trust (Reit) that owns assets including Fourways Mall, Cedar Square and Citibank offices in Johannesburg.

For the six months to endSeptember 2022, Accelerate’s total debt shrunk from R5.9bn in September 2021 to R4.5bn. Of this, 70% was hedged compared with 86.3% in 2021. It had R200m in undrawn facilities.

At the time, the company said it continued to sell noncore assets with proceeds used to reduce loan-to-value (LTV) to a target level of 40%. In September, the LTV had reduced from 47.8% in 2021 to 42.1%. Signed property sales were concluded at an overall 6% discount to book value, the company said.

In a separate statement, the company said its intention to raise R50m by way of a rights offer has been given the green light.

Accelerate will issue 71,248,571 ordinary shares for 70c per rights offer share in the ratio of six rights held at the close of business on February 8.

The proceeds of the rights offer will fund the company’s working capital requirements to right-size the business. It will also strengthen its financial position, and, in particular, enable the repositioning of Fourways Mall.

The share price closed up 3.26% at R0.95.