Strong counterpart and long lease terms provides a defensive underpin to the portfolio.
Accelerate Property Fund, the JSE listed Real Estate Investment Trust with significant exposure in the rapidly developing Fourways, Johannesburg node, today announced that it has entered into an agreement to acquire the property holding companies for six properties currently tenanted by KPMG Inc. and KPMG Services across various centres in South Africa.
The total purchase consideration for the assets is R850 million and Accelerate has access to a fully funded debt package to settle the acquisition.
“We are delighted to announce this transaction. Although our focus strongly remains on retail, we saw a unique opportunity to acquire another quality portfolio through this”
“KPMG is an exceptional counter party to transact with. Their blue chip status, combined with a 15 year lease provides a defensive underpin to our portfolio,” comments Andrew Costa, Chief Operating Officer of Accelerate.
The assets include the iconic KPMG Crescent and sky bridge off Jan Smuts Avenue as well as Wanooka Place in Parktown, and A-grade offices with onsite parking in Polokwane, Port Elizabeth and Secunda, with a combined gross lettable area (GLA) of 46 941 m2.
The acquisition will push Accelerate’s combined portfolio value past R7 billion.
“Our office vacancies improve from 9.4% to 7.4% as a result of there being no vacancies in the KPMG Properties for the full 15 year period. As a result of the acquisition, more than 45% of the weighted average portfolio lease expiry has been extended to post September 2018,” concluded Andrew Costa, Chief Operating Officer of Accelerate.
The acquisitions are subject to South African Competition Authorities’ approval and conditions precedentin line with transaction of this nature.