Shareholder shift for owner of South Africa’s biggest mall
Accelerate Property Fund (AFP), owner of Fourways Mall, has seen a shareholder shift following a green light from the Competition Commission.
The Competition Commission recommended that the Competition Tribunal approve the proposed transaction, with conditions in which K084 intends to acquire a large portion of AFP.
APF, which owns South Africa’s largest shopping centre, Fourways Mall, faces significant challenges.
Since 29 November 2019, APF has owned 50% of the undivided share in Fourways Mall and accounts for it as a joint operation.
The remaining 50% of Fourways Mall is owned by Azrapart Proprietary Limited, a related party as Accelerate director and shareholder Michael Georgiou indirectly owns it.
The mall has been struggling with low rentals and poor financial performance, which continued in the latest financial year.
The group announced in its last financial report that it would be pumping another R400 million into the mall, which will be used to upgrade the centre, which APF hopes will improve cash flow and reduce vacancies.
APF was dealt a tragic blow over this last weekend after its chairman, Tito Mboweni, passed away following a short illness. Mboweni was a former Governor of the South African Reserve Bank and South Africa’s former Finance Minister.
The Competition Commission’s decision relates to K084 breaking the 35% threshold level in regard to its shareholding in APF.
This is in reference to K084 following their rights as part of AFP’s R200 million rights offer announced to earlier this year.
Competition Commission approval is required at the 35% shareholding threshold for listed companies.
Several players are involved in the deal.
The Competition Commission said that the primary acquiring firm, K084, is owned and controlled by Urban Retail Property Investments 3 Proprietary Limited (URP3).
URP3 itself is controlled by the Investment Property Equity En Commandite Partnership (IPE Partnership) and Investment Property Debt En Commandite Partnership (IPD Partnership).
IPE Partnership is controlled by its general partner, IP Equity GP Proprietary Limited (IPE GP). In contrast, IPD Partnership is controlled by its general partner, IP Debt GP Proprietary Limited (IPD GP).
IPE GP and IPD GP are jointly controlled by First Energy Capital Proprietary Limited (FECP).
The Acquiring Group (which includes all the groups above) is a consortium made up of private equity funds.
The Acquiring Group’s investments range across various industries, such as renewable energy projects and property.
APF is listed on the JSE and has interests in the retail and commercial sectors in South Africa.
The Commission said the transaction is unlikely to lessen or substantially prevent market competition.
The Acquiring Group has also committed to promoting ownership by historically disadvantaged persons (HDPs) to address public interest concerns.
Images of Fourways Mall can be found below:
In addition to the APF transaction, the Acquiring Group intends to purchase sole control of K95, with the Competition Commission considering the Target Group’s activities in Castleview Property Fund Limited (CVW).
CVW is a public company listed as a real estate investment trust (REIT) on the JSE’s AltX.
CWV has interests in office, residential and retail property in South Africa.
CVW is also the largest shareholder in the Emira Property fund, which owns several malls nationwide.
The Competition Commission said that the CVW and APF transactions will culminate in the Acquiring Group’s control over a property portfolio that includes office and retail properties.
Like the APF transaction, the Acquiring Group has made commitments relating to the promotion of ownership by HDPs to address public interest concerns.
Update: The article has been updated to clarify the 35% ownership threshold related to the transaction.
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