New acquisition to open doors for Accelerate

LISTED-PROPERTY fund Accelerate believes its acquisition of the Murray & Roberts (M&R) building in the Cape Town Foreshore together with its existing properties in the node created an opportunity for a “large-scale commercial and residential development”.

However, Accelerate has not provided any timeline for such a development.

Accelerate announced in March this year it had acquired two erven situated in the Cape Town Foreshore, comprising the 5 470m² M&R building and an 11 230m² parking lot adjacent for an undisclosed amount.

It said these properties were located adjacent to other properties in the Cape Town Foreshore that were owned by Accelerate, including Oceana House, Thomas Pattullo, 101 Hertzog Boulevard and the Mustek building.

Accelerate said at the time the acquisition of the M&R building enhanced its position in this strategic node and there was significant development potential for this precinct, which Accelerate intended unlocking. The value of Accelerate’s property portfolio grew 38 percent year-on-year to R11.6 billion in March.

Accelerate listed in December 2013 with a property portfolio valued at R5.5bn.

The rise in the past year was largely attributable to Accelerate’s initial offshore investment of R1.25bn and the acquisition of about 50 percent of the iconic Portside tower in Cape Town for R755m, Eden Meander retail centre in George and the Citibank building in Sandton.

Its offshore expansion involved the acquisition of nine retail warehouse properties, six of them in Austria and three in Slovakia.

Accelerate yesterday reported a 7.3 percent growth in distribution a share to 57.57c for the year to March from 53.67c in the previous year.

Gross rental income increased to R1.06bn from R819m. Net property expenses increased to R65.8m from R47.6m. In conjunction with the rise in other operating costs to R74m from R38.7m, this resulted in an increase in the cost to income ratio to 16.9 percent from 13.4 percent.

Vacancies, excluding structural vacancies, increased to 7.1 percent from 6.9 percent while the weighted average lease period improved from 5.1 to 5.6 years.

Diversified

Accelerate chief operating officer Andrew Costa said the past year was important for the company as it diversified its portfolio offshore by creating a bespoke strategy to invest in long-term single-tenant net leased properties that were strategic to blue-chip multinational or large regional tenants in Central and Eastern Europe. Costa said it had also made excellent progress locally with the Fourways Mall redevelopment.

Shares in Accelerate dropped 7.9 percent yesterday to close at R6 on the JSE.