Accelerate Property (APF) is a real estate investment trust (REIT) that manages a portfolio of 56 properties valued at R12.7 billion. The portfolio is distributed across six South African provinces and comprises 70% retail, 15% office, and 15% industrial properties. The company's flagship property is the newly expanded Fourways Mall, in which it holds a 50% stake. Fourways Mall has more than doubled its size to 178,000 square meters, claiming the title of the largest shopping center in Africa. The mall aims to compete with Sandton City and includes features like "Kidzania," a children's activity center, although this was not operational by November 2021.
Accelerate also owns the Cedar Square complex and additional development land near Fourways. The completion of the Fourways development has faced delays, originally slated for September 2018, then April 2019, and finally opened in August 2019, though it still appears unfinished. Given the global shift towards online shopping, the decision to invest heavily in a large shopping mall expansion is questionable. Online shopping in South Africa has significantly increased, tripling over the past five years and doubling since the COVID-19 pandemic. Despite these trends, Accelerate aims to develop a comprehensive business center at Fourways, integrating office, retail, and entertainment spaces.
On 7th April 2022, Accelerate announced the sale of the Leaping Frog shopping center for R130 million to reduce debt, at a price 7.1% or R10 million below book value. In its results for the six months to 30th September 2023, the company reported a revenue increase of 5%, but a headline loss of 2.08c per share compared to a profit of 17.11c in the previous period. The vacancy rate improved slightly to 17.7% from 19.9%. However, the net asset value (NAV) dropped to 406c per share from 500c, and the loan-to-value (LTV) ratio increased to 47.7% from 42.1%, which is concerning.
On 17th July 2024, Accelerate announced that its financials for the year ending 31st March 2024 would be published on 21st July 2024. Despite its current trading price of 55c, which is a fraction of its NAV of 4622c, the NAV is expected to drop sharply once the financials are released. The share appears to be a bargain but carries high and rising debt levels and operates in a challenging retail environment. A crucial factor will be the outcome of its R1 billion lawsuit against its insurers for losses sustained during the COVID-19 pandemic at Fourways Mall.
We believe that there are better, less risky REITs on the JSE. Investors should exercise caution and consider the inherent risks associated with Accelerate Property at its current state.
Accelerate also owns the Cedar Square complex and additional development land near Fourways. The completion of the Fourways development has faced delays, originally slated for September 2018, then April 2019, and finally opened in August 2019, though it still appears unfinished. Given the global shift towards online shopping, the decision to invest heavily in a large shopping mall expansion is questionable. Online shopping in South Africa has significantly increased, tripling over the past five years and doubling since the COVID-19 pandemic. Despite these trends, Accelerate aims to develop a comprehensive business center at Fourways, integrating office, retail, and entertainment spaces.
On 7th April 2022, Accelerate announced the sale of the Leaping Frog shopping center for R130 million to reduce debt, at a price 7.1% or R10 million below book value. In its results for the six months to 30th September 2023, the company reported a revenue increase of 5%, but a headline loss of 2.08c per share compared to a profit of 17.11c in the previous period. The vacancy rate improved slightly to 17.7% from 19.9%. However, the net asset value (NAV) dropped to 406c per share from 500c, and the loan-to-value (LTV) ratio increased to 47.7% from 42.1%, which is concerning.
On 17th July 2024, Accelerate announced that its financials for the year ending 31st March 2024 would be published on 21st July 2024. Despite its current trading price of 55c, which is a fraction of its NAV of 4622c, the NAV is expected to drop sharply once the financials are released. The share appears to be a bargain but carries high and rising debt levels and operates in a challenging retail environment. A crucial factor will be the outcome of its R1 billion lawsuit against its insurers for losses sustained during the COVID-19 pandemic at Fourways Mall.
We believe that there are better, less risky REITs on the JSE. Investors should exercise caution and consider the inherent risks associated with Accelerate Property at its current state.
Feragatname
Bilgiler ve yayınlar, TradingView tarafından sağlanan veya onaylanan finansal, yatırım, işlem veya diğer türden tavsiye veya tavsiyeler anlamına gelmez ve teşkil etmez. Kullanım Şartları'nda daha fazlasını okuyun.
Feragatname
Bilgiler ve yayınlar, TradingView tarafından sağlanan veya onaylanan finansal, yatırım, işlem veya diğer türden tavsiye veya tavsiyeler anlamına gelmez ve teşkil etmez. Kullanım Şartları'nda daha fazlasını okuyun.