Accelerate Property Fund Limited, a key player in the South African real estate sector, has recently disclosed the sale of Cherry Lane Shopping Centre, a significant move in line with the company’s strategic business review.
Accelerate, listed on the JSE Limited (Registration number: 2005/015057/06), revealed the signing of a sale of letting enterprise agreement with Alma Trading CC on 4 December 2023. The transaction involves the disposal of Cherry Lane Shopping Centre, located in Nieuw Muckleneuk Township, Pretoria.
2. The Property
Cherry Lane, part of Accelerate’s retail portfolio since its acquisition in December 2013, was valued at R65 million as of 31 March 2023. The sale, executed for a cash consideration of R60 million, reflects the company’s commitment to optimizing its asset portfolio.
3. Application of Sale Proceeds
Accelerate intends to utilize the full proceeds from the sale to reduce debt and/or reinvest in its core property portfolio, aligning with its balance sheet optimization strategy.
4. Rationale for the Transaction and Balance Sheet Optimization Strategy
The decision to sell Cherry Lane is a result of Accelerate’s ongoing efforts to ensure its assets align with the company’s current business strategy and growth plans. The executive team, while acknowledging the weight of the decision, believes it is in the best interest of the company and its shareholders.
5. Key Transaction Terms
The purchaser, Alma Trading CC, is set to pay a refundable deposit of R1 million into the conveyancers’ trust account within 48 hours of signing the Sale Agreement.
6. Conditions Precedent
The transaction includes a 30-business days due diligence period from the date of signing the Sale Agreement, followed by an additional 30 calendar days for the purchaser to provide guarantees.
7. Information Relating to the Property
|For the Year to 31 March 2023
|For the Six Months to 30 September 2023
|Gross Lettable Area (GLA)
|Weighted Average Rent per m²
|Net Property Income
|Weighted Average Lease Expiry
Directors’ valuation as at 31 March 2023, based on cash flows and forward net income achieved by the Property at the valuation date.
The seller (Accelerate) has provided warranties and indemnities to the purchaser that are standard for a transaction of this nature.
Cautionary Statement Regarding Forward-Looking Statements
Accelerate issues a cautionary statement regarding forward-looking statements, acknowledging that certain statements in the announcement may be considered forward-looking. While the company believes the expectations are reasonable, no assurance can be given, and Accelerate does not undertake any obligation to publicly update or revise the information provided.
This strategic move by Accelerate reflects the dynamic nature of the real estate industry in South Africa, with companies continually optimizing portfolios to adapt to changing market conditions. The sale of Cherry Lane Shopping Centre underscores Accelerate’s commitment to shaping a resilient and growth-oriented property portfolio.