Accelerate Property Fund will spend R200m funded from noncore asset disposals to reposition its flagship asset, the Fourways Mall, north of Johannesburg.
The JSE-listed diversified real estate investment trust (Reit) owns assets in the Fourways node including BMW Fourways, Cedar Square, The Buzz Shopping Centre and Waterford, as well as Portside in Cape Town.
Accelerate, which has been selling noncore assets to reduce debt, aims to optimise value extraction from its co-owned asset, Fourways Mall.
The R8bn super-regional shopping centre, with a gross lettable area of 178,202m2, completed a major revamp which more than doubled its size in September 2019.
Retail trading, which was affected by the construction period of about four years, was made worse by the Covid-19 pandemic which began in March 2020.
“We are re-evaluating the property and asset management functions of the mall to position it as the first-choice family-orientated entertainment and shopping destination in the locality,” said joint CEO Abri Schneider.
Schneider said the new strategy would address factors including the overall retail experience, the dwell time in the mall enhanced by entertainment and food offering, increase the retail offering by rightsizing some stores and attract shoppers beyond the immediate catchment area.
Additionally, signage in and around Fourways Mall will be upgraded, as well as improving internal and external aesthetics.
To this end, Accelerate has appointed retail experts Flanagan and Gerard to manage Fourways Mall.
Schneider said post the pandemic, the mall has consistently recorded double-digit turnover and trading density growth off a low base — reaching 5.1% annualised growth in trading densities on a year-on-year basis for the six months ended September 30.
Vacancies increased from 14,349m2 in March to 15,109m2. Nearly 4,000m2 of new tenants signed up since March have commenced trading. New tenants already trading or in the process of opening include Volvo and Chery Fourways, McDonald's, Police, Hacket London, Senqu and John Dory’s.
“Double-digit increases in municipal expenses as well as increased diesel costs due to load-shedding is causing significant increases in the cost of occupancy for our tenants and is putting profit margins under pressure.”
Accelerate said it is progressing well with solar installations at Fourways Mall, Cedar Square, BMW Fourways, The Buzz, and Waterford. “These power alternatives will not only ensure reliable electricity supply for tenants but will reduce the group’s carbon footprint and save on increasing utility costs,” said Schneider.
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