Accelerate reports robust results focused nodal strategy provides Resilience

Posted On Tuesday, 08 November 2016 22:50 Published by
Rate this item
(0 votes)

Accelerate Property Fund, the JSE listed Real Estate Investment Trust with significant exposure in the dynamic Fourways node, Johannesburg, today reported robust interim results notwithstanding a challenging macro-economic and political environment.

Eden_Meander

Accelerate reported year-on-year distribution growth of 8.1%, translating into a distribution per share of 28.766 cents, up from 26.617 cents in the comparative reporting period.

“Our focused nodal strategy has assisted us in the current challenging business environment that we operate in. Our retail concentration in the Fourways area and portfolio of high quality assets underpinned by long-term leases with strong performing tenants provides resilience over the long-term.

“Accelerate remains focussed on maximising rental income and tenant recoveries, reducing vacancies, effectively managing costs and enhancing the quality of our property portfolio,” commented Andrew Costa, Chief Operating Officer of the Fund.

During the reporting period, Accelerate earned gross rental income, excluding straight line rental revenue adjustments, of R498 million compared to R417 million for the previous comparable period. The fund reported a decrease cost-to-income ratio of 13.96% (2015: 17.93%), largely due to lower net property expenses of R27.7 million compared to R40.6 million for the same period in 2015.

Accelerate’s property portfolio value increased by 17% to R9.1 billion at the end of the reporting period. This is largely due to the successful acquisition of approximately 50% of the Portside Tower in Cape Town, a Premium-grade office and retail building, for a purchase price of R755 million. The Portside Tower is the tallest building in Cape Town with a 5-star green rating. It holds 1 444 parking bays, 70 of which are designated for hybrid or alternative fuel vehicles with 16 holding electric car chargers; 70 motorcycle bays; and space for 227 bicycles with community bicycle racks also available to the public. The building is designed to encourage employees to cycle to work with clear cycle routes allocated and change rooms with showers as well as lockers.

“The Portside transaction is in line with our strategic objective to develop and grow key nodes in South Africa. This asset gives us the opportunity to expand in the growing Foreshore node in the Western Cape,” commented Costa.

Post the reporting period, Eden Meander lifestyle centre in George successfully transferred to Accelerate.

The expansion and upgrade of Fourways Mall is on track with the first phase anchored by a flagship Bounce store. This phase also comprises an upgraded Food court and certain parkades, scheduled to be opened within the next month.

“We are very excited about the Fourways Mall redevelopment. Approximately 90 000m² of retail space will be added to the existing Fourways Mall with a projected completion date of 2018 making it one of the largest malls in Africa,” said Costa.

On 24 October 2016, Accelerate announced the conclusion of a pre-agreement regarding the acquisition of nine well located retail warehouse properties tenanted by OBI GmbH & Co. Deutschland KG’s (“OBI”), six properties in Austria and three in Slovakia, for an aggregate acquisition value of €82.1 million.

“We carefully considered our offshore strategy which is underpinned by a defined investment philosophy to development and acquire single tenant net long-term leased properties that are strategic to blue-chip multinational or large regional tenants in Central and Eastern Europe (“CEE”). This strategy which we believe provides South African investors with unique exposure to the region, complements Accelerate’s defensive focus in South Africa on quality retail and strategic nodes as well as properties.

“OBI is the largest specialist do-it-yourself (“DIY”) retailer in CEE. Our locations have good access, exceptional visibility and are situated in established retail nodes within a large catchment area or in close proximity to retail that is complementary to DIY stores.” 

The current Accelerate portfolio split by revenue comprises 66.8% retail, 26.6% office and 6.6% industrial with focus in strategic nodes being the Fourways Precinct, Charles Crescent, Foreshore and Somerset West in Cape Town.

“Despite the current market conditions we are confident in our ability to maximise value creation by optimally managing our portfolio and successfully conclude high quality acquisitions locally and offshore,” concluded Costa.

Last modified on Tuesday, 08 November 2016 23:09

Most Popular

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

Sep 23, 2019
 MOA PNP  1
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
 JASON MCCORMICK
Real estate investment trust, Exemplar REITail, has acquired Katale Square shopping…

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

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

4AX listed Heartwood Properties reveals positive financial results

Sep 23, 2019
 JOHN WHALL
Commercial property development company, Heartwood Properties , has revealed a 30%…

Reserve Bank keeps repo rate unchanged

Sep 23, 2019
 LESETJA KGANYAGO
 South African Reserve Bank Governor Lesetja Kganyago on Thursday said this is in line…

Please publish modules in offcanvas position.