Accelerate Property Fund Limited, has announced the sale of two of its key office properties, Pri-movie Park Building and 1 Charles Crescent Building. This significant move comes as a strategic response to the high vacancies the buildings are experiencing, standing at 40.9% and 100.0% respectively. The sale was facilitated through a sale of letting enterprise agreement with Micawber 832 (Pty) Limited, represented by Justin Blend.
Property Details:
| Property | Location | GLA (m²) | Net Rent (R/m²) | Vacancy | Valuation (R) |
|---|---|---|---|---|---|
| Pri-movie Park | 185 Katherine Street, Eastgate | 17,177 | R12.85 | 40.9% | R101,699,461 |
| 1 Charles Crescent | 1 Charles Crescent, Eastgate | 15,547 | N/A | 100.0% | R63,525,456 |
The combined purchase price for these properties amounts to a staggering R117,000,000, with Pri-movie Park alone valued at R101,699,461 as of 31 March 2023.
Reasons for the Sale:
The decision to sell these prime properties was driven by the high vacancy rates and the substantial capital outlay required for their upkeep. Pri-movie Park, with a vacant office space of 65.0%, necessitated strategic action. Accelerate’s move aligns with their ongoing efforts to reduce debt and enhance key treasury metrics, all while ensuring positive income accretion due to the disposal of properties with high vacancy levels.
Impact and Utilization of Funds:
The sale proceeds, earmarked to reduce debt and potentially reinvest in Accelerate’s core property portfolio, signify a pivotal financial strategy for the company. Accelerate’s shareholders and noteholders have been assured that these financial decisions are in the best interests of the company and its stakeholders.
Transaction Details:
Accelerate Property Fund Limited, having entered into a sale of letting enterprise agreement with Micawber 832 (Pty) Limited, will witness the effective transfer of ownership upon the transaction’s completion. A non-refundable deposit of R15,000,000 related to Pri-movie Park has been made to the conveyancer’s account. The purchaser is expected to secure at least 80% of the purchase price within 120 days from the date of signing the sale agreement.
Cautionary Note:
In a cautionary statement, Accelerate Property Fund Limited emphasized that certain statements in the announcement may be considered forward-looking. While the company believes these expectations are reasonable, no assurance has been provided regarding their accuracy.
