Accelerate misses deadline for Fourways Mall reopening
With the property group’s share price having fallen 56% over the past year, investors are ‘becoming impatient’
JSE-listed Accelerate Property Fund has missed its deadline to reopen the redeveloped Fourways Mall, Africa’s largest shopping centre.
The mall, which will more than double in size once completed, was meant to reopen at the end of April. Now Accelerate is hoping its new sections will trade from the end of August.
However, investors are said to becoming impatient. Accelerate’s share price is under pressure, having fallen 56% over the past year. Anchor Stockbrokers research head Craig Smith, said that while the mall could succeed over the long term, delays have created concern.
“The delay in opening is obviously not ideal as it will result in a potential loss of income, certainly an opportunity cost for the fund and investors. Also, if there are further delays it may pose a leasing risk as I would imagine certain tenants would stipulate in their leases that they have the right to terminate the lease if occupation is not obtained by a certain date,” he said.
But Smith said the mall’s overhaul had been planned after a lot of research, and Accelerate was not pinning its success on the Fourways node for nothing.
“Long-term, I think the extended mall will be a success given the density and demographics surrounding the mall. Short-term, however, may be a challenge as it is extremely challenging to be leasing space into this market,” he said.
Stanlib head of listed property funds Keillen Ndlovu said that the fall in Accelerate’s share price stemmed from numerous sources.
“While there is no development risk or income risk for Accelerate during the development, the market is anxious to see the completion of the long overdue Fourways Mall development. In addition, the completion will help to move on from the equalisation structure the fund uses, which is confusing to most people.
“This, together with the unfortunate economic timing and perceived huge size of the mall, among other issues, has seen Accelerate’s share price decelerate,” he said.
COO Andrew Costa said the Fourways Mall was “at its finishing stage”.
There would be about 450 stores on opening.
Accelerate was listed on the JSE at the end of 2013 with the intention of the company becoming the dominant landlord in the Fourways node, which some analysts say will compete with Sandton and Waterfall in attracting businesses and residents.
At 174,000m², from 85,000m², the mall would be larger than the 131,000m² Mall of Africa in Waterfall and the 166,636m² Gateway Theatre of Shopping in Durban.
Costa said the majority of the company’s income will be derived from the Fourways node, where Accelerate has become the largest landlord . The real estate investment trust also owns The Buzz Shopping Centre, Fourways View and Cedar Square in the node.