Got some change? Here’s why Fourways Mall co-owner is looking for R200m

Fourways Mall co-owner Accelerate Property Fund is on a quest to raise R200 million.

The holding company recently put out 500 million rights offer shares to raise the multi-million rand figure.

Not long after the announcement, reports emerged suggesting the amount was exclusively aimed at giving Fourways Mall a financial boost. However, Accelerate said that is not entirely true.

So, what’s the multi-million rand drive all about?

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‘Expensive debt’

Speaking to The Citizen, a spokesperson said the company intends to raise the funds at a ‘group level’ to service its debt for the holding company.

“The main portion of the rights offer will be used alongside other strategies to settle expensive debt on Accelerate’s balance sheet, considering the very high current interest rate environment.”

The company, which owns 50% of Fourways Mall, intends to meet the pricey target by offering 40 cents a share.

“This means existing investors have the opportunity to buy more shares in Accelerate, according to their current shareholding. Shareholders following their rights will not be diluted,” the spokesperson said.

“The rights offer is also underwritten, which means there is a commitment from the underwriter to buy any shares not taken up by existing shareholders, guaranteeing the success of the rights offer.”

Downward spiral

Accelerate’s share price has been on a downward spiral since the Covid-19 pandemic, dropping from R344 in June 2019 to R56 in April 2024.

The JSE-listed company’s property portfolio is valued at R8 billion, with properties located mainly in Fourways, Sandton and Cape Town.

Accelerate blamed the dip on rising interest rates.

“Property companies are by nature sensitive to rising interest rates, which has impacted most of the JSE’s listed real estate investment trusts.

“This is reflected in most Reits’ share prices since Covid, which are currently trading at deep discounts to the net asset value [the portfolio value less all outstanding debt].

“History has shown that large-scale malls require some time to be bedded down and trade optimally.”

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Plans for Fourways Mall

Approximately 17% of Fourways Mall was vacant at the end of September 2024.

“Discussions with several exciting new tenants are well advanced to reduce this,” the spokesperson said.

But the company will still have to pull out the chequebook to restore the once lucrative investment to its former profit glory.

“Accelerate and the co-owner plan on spending a significant amount of capex to improve the overall retail experience with a greater variety and entertainment offerings.”

What’s the plan? The co-owner said it plans to reposition Fourways Mall as a secure, family-orientated entertainment and shopping destination.

“An improved food and restaurant offering is also in the making, expected to attract visitors from within the immediate catchment area and beyond.

“As co-owner of Fourways Mall, we remain excited about the future of the mall.”

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