Owner of the largest shopping mall in South Africa puts 15% of Fourways Mall on the table
Co-owner of South Africa’s largest shopping mall, Accelerate Property Fund, has signed a new property development and asset management services (PMA) agreement, which could result in 15% of the mall being transferred or bought by its managers.
The PMA was signed with the same groups involved in the old one, Flanagan and Gerard Frontiers (F&G) and Luvon Investments as the joint property and asset manager for the mall.
Accelerate appointed the companies in February 2024 to turn the ailing Fourways Mall around. However, this appointment was deemed improper.
The group unilaterally appointed the groups without first seeking approval from shareholders, which led to a public censure and R500,000 penalty from the JSE in August.
However, the new PMA moves to regularise the appointment.
The new PMA is largely the same as the old one: F&G and Luvon, as joint managers, will oversee day-to-day operations, tenant relations, and general property administration for the mall.
They will also be involved with strategic portfolio optimisation, tenant mix strategy, driving footfall and trading densities, and implementing sustainability programmes.
According to Accelerate, the co-managers have already vastly improved the performance of Fourways Mall, and are expected to continue doing so.
Since taking over management, Fourways Mall has seen:
- A reduction in vacancies from 18.8% in February 2024 to 6.6% as of August 2026;
- An improvement in tenant turnover from R226.3 million (February 2024) to R365.2 million (August 2026)
- An improvement in average trading densities from R1,816/m² (February 2024) to R2,711/m² (August 2026);
- An improvement in average dwell time from 1 hour 13 minutes (February 2024) to 1 hour 28 minutes (August 2026);
- An increase in footfall from a first reading of 1,069,780 people in September 2024 to 1,392,271 people in August 2026;
- An increase in vehicle count from 198,272 cars in February 2024 to 294,085 cars in August 2026;
- Implementation of waterproofing and resolving of various compliance-related matters; and
- The management of the upgrade, known as The View, a luxury lifestyle food offering at the corner
of Cedar and Witkoppen Roads.
Going forward, the managers are expected to continue reducing vacancies, drawing new tenants, improving trading densities and installing a 6.3MW solar installation as part of a broader sustainability push.
The new agreement
The new PMA comes into effect retroactively from February 2024, when the managers were appointed, regularising the failings of the previous agreement.
As a 5-year agreement, it is expected to terminate in February 2029 unless extended by the parties.
The new PMA also carries the same remuneration and reward conditions as the old one, which includes the potential shift in shareholding.
Upon termination, Fourways Mall’s share ownership could shift significantly, with F&G and Luvon potentially becoming shareholders of up to 15% of the mall.
Under the PMA, the compensation for the joint managers is structured into ongoing monthly service fees, a performance-based fee upon contract termination, and an equity call option.
At the end of the contract, the managers are entitled to a performance-based fee, payable at the managers’ choice either in cash or as an undivided equity share in Fourways Mall.
The managers will also have the option to buy an additional undivided share, capped at 15%, in Fourways Mall.
Accelerate currently owns a 50% undivided share in Fourways Mall, valued at R4.2 billion, representing 50% of the R8.4 billion total valuation, with the remaining 50% held by co-owner Azrapart Proprietary Limited.
If the managers opt for the share option, the disposal of the minority interest will be split equally between the current co-owners of the mall (Accelerate and Azrapart).
If the agreement is terminated before February 2029, the managers are guaranteed certain payouts.
This ranges from R130 million if terminated in the third year to R150 million if it is terminated in the fifth year.
Notably, while the new agreement has been formally entered into, it has not yet been approved by shareholders.
Shareholder approval remains an outstanding suspensive condition of the agreement, which must be fulfilled by 17 December 2026.
While the vote has not yet taken place, Accelerate has secured an irrevocable undertaking from a shareholder holding 50.7% of voting shares to vote in favour the PMA.
Accelerate said it has the right to cancel the new PMA on 3 months’ notice to the managers if shareholders resolve to cancel the agreement by way of a majority of votes.
However, to the extent that the PMA is cancelled in this manner, the managers will still be entitled to their fees and to exercise the call option for 15% of the mall.
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