Ac­cel­er­ate on R615m prop­erty ac­qui­si­tion spree

The Star Early Edition - - NEWS - Roy Cokayne

LISTED prop­erty fund Ac­cel­er­ate has ac­quired two prop­erty port­fo­lios, in­clud­ing the Sho­prite Dis­tri­bu­tion Cen­tre in Mon­tague Gar­dens in Cape Town, for a to­tal of R615 mil­lion and marginally ex­ceeded its pre-list­ing fore­casted dis­tri­bu­tion for the six months to Septem­ber.

The fund yes­ter­day de­clared an in­terim dis­tri­bu­tion a share of 23.99c com­pared to the prelist­ing fore­cast of 23.93c.

Its port­fo­lio con­sisted of 51 prop­er­ties at end-Septem­ber, which in­cludes sig­nif­i­cant ex­po­sure to the Four­ways node in Jo­han­nes­burg, in­de­pen­dently val­ued at R6.13 bil­lion.

The ac­qui­si­tion of the two port­fo­lios an­nounced yes­ter­day con­sti­tute two sep­a­rate trans­ac­tions, which are not con­di­tional on each other.

The first port­fo­lio was ac­quired for R468m and com­prises six sin­gle-ten­anted build­ings with long-term lease pro­files in ex­cess of five years for five of the six let­ting en­ter­prises.

It in­cludes a Pick n Pay dis­tri­bu­tion cen­tre in Port El­iz­a­beth; res­i­den­tial re­tire­ment lodge Bryanston Lodge; a ware­house build­ing with of­fices in Eastgate leased to MB Tech­nolo­gies; and a dou­ble storey re­tail prop­erty with street frontage in the Pi­eters­burg cen­tral business dis­trict leased by Edgars.

The sec­ond port­fo­lio ac­quired for R147m com­prises the Sho­prite Dis­tri­bu­tion Cen­tre. The pur­chase price will be set­tled through a com­bi­na­tion of cash, debt and al­lot­ment, and is­sue of new Ac­cel­er­ate shares.

The trans­ac­tions are still sub­ject to var­i­ous ap­provals.

Ac­cel­er­ate said the ac­qui­si­tions would in­crease its port­fo­lio weight­ing within the in­dus­trial sec­tor and im­prove its ge­o­graph­i­cal spread while still main­tain­ing the fund’s strong re­tail bias.

Dur­ing the six months to Septem­ber, Ac­cel­er­ate re­ceived ap­proval from the JSE for its R5bn do­mes­tic medi­umterm note.

The first is­sue was in Septem­ber and was sig­nif­i­cantly over­sub­scribed. Ac­cel­er­ate raised a to­tal of R701m debt via the cap­i­tal mar­kets this year.

Ac­cel­er­ate re­ported a distributable profit after tax­a­tion at­trib­ut­able to share­hold­ers of R141.6m for the six months to Septem­ber, which is marginally higher than the fore­cast of R141.2m.

Gross rental in­come of R335.8m for the pe­riod com­prised net rentals of R246m and R75.3m of op­er­at­ing ex­pense re­cov­er­ies.

An­drew Costa, the chief op­er­at­ing of­fi­cer at Ac­cel­er­ate, said the fund op­ti­mised the port­fo­lio in the re­port­ing pe­riod, sig­nif­i­cantly re­duced the of­fice vacancy rate from 18.1 per­cent to 10.3 per­cent, and kept a tight han­dle on costs.

Dur­ing the re­port­ing pe­riod, Ac­cel­er­ate in­vested R23m in the re­fur­bish­ment of the Thomas Pat­tullo of­fice prop­erty in Cape Town after se­cur­ing a long-term lease with Bytes Tech­nol­ogy, and dis­posed of the Wil­lows Shop­ping Cen­tre in Pre­to­ria East for R77.1m, re­sult­ing in a profit of R12.1m.

Short-term debt of R358m was suc­cess­fully re­fi­nanced and the fund has fixed 89.7 per­cent of its to­tal debt at a blended in­ter­est rate of 7.18 per­cent.

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