Asset sales and capital injection cut debt while improved vacancies and footfall signal recovery momentum.
Accelerate Property Fund has reached a critical juncture in its multi-year restructuring, successfully raising and realising R2 billion in capital to deleverage its balance sheet.
Since June 2024, the Reit (real estate investment trust) has aggressively trimmed its portfolio and injected fresh capital into its “crown jewel”, Fourways Mall, aiming to transform into a more stable, premium retail-oriented fund.
Fourways Mall turnaround
The fund’s recovery strategy is anchored by a R346 million investment (Accelerate’s share being R173 million) into Fourways Mall.
Under the new management of Flanagan & Gerard and Moolman Group, the mall’s vacancy rate has dropped from 16.1% to 9.4% as at February 2026, with projections to reach 5% by September 2026.
Operating metrics show significant momentum:
- Footfall surged 20% year-on-year between November 2025 and February 2026;
- Trading density increased by 8.6% over the rolling 12 months to February; and
- ‘The View’ dining hub: A further R100 million is being invested to upgrade the food offering by September 2026, introducing high-end tenants like tashas, Pantry and Clay Café.
Debt reduction and asset disposals
To address its debt levels, Accelerate has concluded approximately R1.7 billion in property disposals over the last two financial years.
Recent high-value transfers include Portside Tower for R580 million and 73 Hertzog Boulevard for R77.9 million in Cape Town. These initiatives have successfully reduced the group’s debt by approximately R1.9 billion.
Pending unconditional disposals, including The Buzz and Waterford in Gauteng (R215 million), are expected to transfer post-year-end, further strengthening the fund’s interest cover ratio and capital structure.
Near-term challenges: Oceana and KPMG
Despite the operational gains, management has warned of upcoming pressure on earnings.
Oceana Group will vacate 6 049m² at Oceana House in Cape Town in June, a move that could increase the fund’s vacancy rate by 2.6% if the space is not quickly relet.
Additionally, the fund’s long-term lease with KPMG includes a “reversion to market” clause effective August 2026. Because the current rental is materially above market levels, the adjustment is expected to reduce contractual rental income.
Outlook and dividends
In light of these pressures, the fund has engaged with debt funders for covenant relief and does not expect to declare a dividend in the near term.
Accelerate’s restructuring remains focused on execution, with the goal of embedding a more resilient operating platform aligned with its premium retail repositioning.
The group will enter a closed period on 1 April, with full annual results anticipated on 31 July.
This article was republished from Moneyweb. Read the original here.
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