South Africa’s biggest shopping mall hits a speed bump

Owners of South Africa’s largest shopping mall, Fourways Mall, Accelerate Property Fund, has announced that a deal to potentially dispose of a 15% stake in the centre has fallen through.

In August, Accelerate announced that it would be exploring an agreement with mall’s new managers—Flanagan & Gerard and Luvon Investments (the Moolman Group)—including a possible option to dispose of a 15% stake in the asset.

The group concluded the development and asset management services agreement with F&G and Moolman in August, but flagged the potential disposal of a minority interest in the mall as part of the agreement.

However, in a notice shareholders on Friday (22 November), the group said that the terms of the potential deal had fallen through.

“Shareholders are hereby advised that the suspensive conditions in the agreement were not fulfilled on time and as a result the agreement is of no force and effect,” Accelerate said.

Despite the agreement falling through, Accelerate said that F&G and Luvon are on site at the mall and continue to render the requisite services in respect of Fourways Mall.

Further to this, the group said it is engaging with the various parties to the agreement in order to conclude a new agreement on the same or substantially the same terms as the previous agreement, which would include an extension of the time period for the fulfilment of the suspensive conditions.

“Shareholders will be notified of further developments in this regard in due course,” it said.

In the meantime, the group has withdrawn a cautionary announcement attached to the deal and advised that share trading can continue as normal.

Turnaround plan

F&G and Luvon (Moolman Group) are spearheading a R400 million management and feature overhaul at Fourways Mall in a bid to turn the regional centre’s fortunes around.

Fourways Mall is by far the biggest asset in the Accelerate portfolio, with the group’s 50% share valued at R3.9 billion (and the whole mall itself worth R7.8 billion). It is also the biggest shopping mall in South Africa with a GLA of 178,202 square meters.

Despite this, the mall has been suffering from a high number of empty shops, with the vacancy rate increasing from 3% in 2021 to 20% three years later.

The net rent per square meter declined from R278 in 2019 to R223 in 2024, and rental income declined from R330 million to R295 million over the last year.

In terms of the management agreement—laid out in August—the groups will be providing management services for a five-year period, unless all parties agree to terminate the contract early (including lenders), the group defaults, or the co-owners dispose of their entire share of the mall.

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