Accelerate Property Fund has released its results for the year ended 31st of March 2018, reflecting a 57.56 cents per share distribution for the year, in line with guidance.
“Our core portfolio performed well in a challenging economic and socio-political environment in South Africa, while our offshore portfolio performed well above expectations, and is the foundation of a solid scalable international platform” commented Andrew Costa, Chief Operating Officer of Accelerate,.
“The 2018 year was a year of consolidation, with the fund focusing on balance sheet optimisation, managing costs as well as enhancing the quality of our property portfolio, ensuring long term sustainability.”
Accelerate’s nodal strategy enables economies of scale within these nodes where any investment in improving specific properties, infrastructure or service benefits other properties owned by Accelerate in the same area.
The fund’s key focus remains on the Fourways Mall redevelopment and the node around this property continues to demonstrate impressive economic fundamentals and potential.
The super-regional development of approximately 178 000 square meters is sitting at 93% pre-let with offers received on the remaining space. Nearing completion, the development has a phased opening due to begin at the end of 2018.
Michael Georgiou, Chief Executive Officer of Accelerate commented:
“We are very excited about the Fourways Mall redevelopment, which will have transformed into a super-regional centre by its official reopening. Its top-quality retail tenant mix, residential densities, along with the broader development of the node is set to make Fourways the most dominant and valuable retail market in South Africa.”
Lease escalation remain strong at 7.7% locally, despite the tough economic environment, whilst the weighted average lease expiry remained defensive at 5.5 years for the total portfolio. Vacancies across the portfolio increased from 7% to 10% due to subdued market conditions, specifically in the office sector, but the continued focus on tenant optimisation and retention to protect the group’s income stream is showing positive signs with retail vacancies, which constitutes the core of Accelerate’s business, having reduced from 8% to 5.5%.
The property value of the portfolio increased from R11.6 billion to R12.3 billion during the reporting period, reflecting the quality of the portfolio underpinning the fund.
Accelerate’s European portfolio (mainly in Austria), yielded a weighted average tenant turnover growth of 10.1% and it was independently valued at 91.5 million Euros, up from 82 million Euros on acquisition in December 2016. The offshore portfolio comprises of 8.3% of the fund’s total revenue and it provides diversification to hard currency.
“The underlying core of both Accelerate’s South African and offshore portfolios remains solid and we will continue to focus on extracting optimal value from our chosen nodes. Given this focus, the Fund remains well positioned for the future” Costa concluded.