ACCELERATE Property Fund’s share price increased more than 13 percent yesterday after it announced the sale of its nine properties in Austria and Slovakia for €87.4 million (about R1.55 billion).
The share price of the real estate investment trust, which owns centres such as Fourways Mall and Cedar Square Shopping Centre in Gauteng and Portside in Cape Town, increased as much as 13.4 percent to R1.30 yesterday morning.
The price closed at R1.20 on the JSE yesterday. Accelerate, through its 96.3 percent-owned subsidiary, Accelerate Property Fund Europe, announced it would sell the properties to two subsidiaries of Slate Asset Management.
Slate is a global alternative investment platform focused on real estate, with a history of acquisitions across Canada, the US and Europe.
The deal expands Slate’s European platform into two new, central, fast growing markets and increases its exposure to high-quality essential real estate, Accelerate said in a statement yesterday.
Accelerate said the disposal was in line with its intention to reduce its overall level of gearing, as measured by its loan-to-value (LTV).
According to its last annual results, for the year to March 31, 2021, Accelerate had an LTV of 48.5 percent, a level that had increased from 45.5 percent the year before – this over a period when most Reits were trying their best to lower their LTVs to at least below 40 percent in the uncertain Covid-19 environment.
“The company is of the view that it is important to expedite the reduction of its LTV ratio to improve its credit rating and to strengthen the balance sheet, all of which are expected to return market confidence in Accelerate,” the group said yesterday.
The offshore portfolio includes nine big-box Do-It-Yourself (DIY) retail stores which are tenanted by OBI GmbH & Co Deutschland KG, one of the largest DIY retailers in Central and Eastern Europe.
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