Roy Cokayne
LISTED property fund Accelerate has acquired two property portfolios, including the Shoprite Distribution Centre in Montague Gardens in Cape Town, for a total of R615 million and marginally exceeded its pre-listing forecasted distribution for the six months to September.
The fund yesterday declared an interim distribution a share of 23.99c compared to the prelisting forecast of 23.93c.
Its portfolio consisted of 51 properties at end-September, which includes significant exposure to the Fourways node in Johannesburg, independently valued at R6.13 billion.
The acquisition of the two portfolios announced yesterday constitute two separate transactions, which are not conditional on each other.
The first portfolio was acquired for R468m and comprises six single-tenanted buildings with long-term lease profiles in excess of five years for five of the six letting enterprises.
It includes a Pick n Pay distribution centre in Port Elizabeth; residential retirement lodge Bryanston Lodge; a warehouse building with offices in Eastgate leased to MB Technologies; and a double storey retail property with street frontage in the Pietersburg central business district leased by Edgars.
The second portfolio acquired for R147m comprises the Shoprite Distribution Centre. The purchase price will be settled through a combination of cash, debt and allotment, and issue of new Accelerate shares.
The transactions are still subject to various approvals.
Accelerate said the acquisitions would increase its portfolio weighting within the industrial sector and improve its geographical spread while still maintaining the fund’s strong retail bias.
During the six months to September, Accelerate received approval from the JSE for its R5bn domestic medium-term note.
The first issue was in September and was significantly oversubscribed. Accelerate raised a total of R701m debt via the capital markets this year.
Accelerate reported a distributable profit after taxation attributable to shareholders of R141.6m for the six months to September, which is marginally higher than the forecast of R141.2m.
Gross rental income of R335.8m for the period comprised net rentals of R246m and R75.3m of operating expense recoveries.
Andrew Costa, the chief operating officer at Accelerate, said the fund optimised the portfolio in the reporting period, significantly reduced the office vacancy rate from 18.1 percent to 10.3 percent, and kept a tight handle on costs.
During the reporting period, Accelerate invested R23m in the refurbishment of the Thomas Pattullo office property in Cape Town after securing a long-term lease with Bytes Technology, and disposed of the Willows Shopping Centre in Pretoria East for R77.1m, resulting in a profit of R12.1m.
Short-term debt of R358m was successfully refinanced and the fund has fixed 89.7 percent of its total debt at a blended interest rate of 7.18 percent.