Accelerate Property Fund (APF) is taking significant steps to manage its financial position by offloading some substantial properties. Selling these assets, especially notable ones like Portside Tower seems like a strategic move to reduce their debt burden, which is quite large at R3.7 billion.
Portside Tower is quite a landmark in Cape Town, both because of its height and its environmentally friendly credentials, with a 5-star Green Building Council rating. It’s always intriguing when such iconic buildings change hands, as it can sometimes signal shifts in the local real estate market or changes in strategic focuses for large companies.
Accelerate Property Fund’s strategy to sell these properties primarily aims to reduce their substantial debt burden. By divesting from key assets such as the Portside Tower, The Buzz Shopping Centre, and Waterford Centre, APF expects to generate around R985 million. This amount doesn’t include potential revenue from the Oceana Group’s head office and the Thomas Pattullo building in Cape Town.
It’s noteworthy that APF has revised their valuation of these properties, increasing it by R153 million compared to previous assessments. This suggests that the current market conditions or strategic factors may have enhanced perceived value, even if these valuations exceed what the market might currently pay.
The company’s priority is managing its net debt, which was R3.7 billion as of September 2024. This effort involves refinancing and negotiating to extend existing facilities, particularly considering significant debt obligations maturing by March 2025. By focusing on retaining only a handful of top-performing properties, APF seeks to stabilize its financial position while maintaining strategic properties like Fourways Mall and Cedar Square.
Their debt-reduction strategy is a prudent approach to mitigate potential financial strain, especially with significant maturities looming in 2025. It appears they’re also negotiating extensions for existing debt facilities. By retaining key assets like Fourways Mall and Cedar Square, they seem to be balancing between liquidating specific properties and maintaining a core portfolio to generate ongoing revenue.
It will be interesting to see who the buyers are and how this reshaping of their portfolio affects APF’s long-term strategy.
