New ac­qui­si­tion to open doors for Ac­cel­er­ate

The Star Early Edition - - COMPANIES - Roy Cokayne

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.

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