{"id":782961,"date":"2024-07-17T14:00:00","date_gmt":"2024-07-17T12:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=782961"},"modified":"2024-07-17T13:22:11","modified_gmt":"2024-07-17T11:22:11","slug":"south-africas-biggest-shopping-malls-owner-in-serious-trouble","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/property\/782961\/south-africas-biggest-shopping-malls-owner-in-serious-trouble\/","title":{"rendered":"South Africa’s biggest shopping mall’s owner in serious trouble"},"content":{"rendered":"\n

Accelerate Property Fund (Accelerate), which owns South Africa\u2019s largest shopping centre, Fourways Mall, is facing significant difficulties.<\/p>\n\n\n\n

On Tuesday, after the markets closed, it informed shareholders that it had experienced another delay in finalising its audited annual financial statements.<\/p>\n\n\n\n

To understand why this poses such a problem, one has to turn back the clock to 27 June 2024, when the first delay hit the company.<\/p>\n\n\n\n

It informed shareholders that its financial results for the year ended 31 March 2024 would not be published by the expected date of 30 June 2024.<\/p>\n\n\n\n

\u201cIt is anticipated the financial results will be released by no later than Wednesday, 10 July 2024,\u201d it said at the time.<\/p>\n\n\n\n

However, on 9 July, a day before the deadline, the company informed shareholders that it would not meet the 10 July 2024 deadline as previously indicated.<\/p>\n\n\n\n

\u201cIt is anticipated the Financial Results will be released during the course of the day on Monday, 15 July 2024,\u201d it said.<\/p>\n\n\n\n

However, 15 July came and went without any results from Accelerate Property Fund. This raised concerns among many investors.<\/p>\n\n\n\n

On 16 July, after the markets closed, Accelerate released a statement on the JSE Stock Exchange News Service about a further postponement.<\/p>\n\n\n\n

\u201cThe postponement remains due to a delay in the finalisation of the audited annual financial statements for the year ended 31 March 2024 and the auditors’ sign-off thereon,\u201d it said.<\/p>\n\n\n\n

\u201cIt is anticipated the Financial Results will be released by no later than 21 July 2024,\u201d Accelerate said.<\/p>\n\n\n\n

The Johannesburg Stock Exchange (JSE) took a dim view of the continual delays. On 15 July 2024, it addressed Accelerate\u2019s delay in submitting its financial statements.<\/p>\n\n\n\n

It missed the three-month period stipulated in the JSE\u2019s listings requirements to publish its annual financial statements<\/p>\n\n\n\n

Accordingly, Accelerate\u2019s listing on the JSE trading system has been annotated with a \u2018RE\u2019 to indicate that they have failed to submit their statements timeously.<\/p>\n\n\n\n

The JSE added that Accelerate\u2019s listing is under threat of suspension and possible removal from the exchange.<\/p>\n\n\n\n

\u201cIf Accelerate Property Fund still fails to submit their Annual financial statements on or before 31 July 2024, then their listing may be suspended,\u201d it said.<\/p>\n\n\n\n

Accelerate Property Fund in trouble<\/strong><\/h2>\n\n\n\n
\"\"<\/a>
Fourways Mall empty stores<\/figcaption><\/figure>\n\n\n\n

Accelerate Property Fund faces significant challenges, including problems with its biggest investment, Fourways Mall.<\/p>\n\n\n\n

Accelerate Property Fund (APF) owns 50% of Fourways Mall which has been struggling with low rentals and a poor financial performance.<\/p>\n\n\n\n

Accelerate Property Fund\u2019s latest results revealed that Fourways Mall\u2019s vacancies increased from 14,349 sqm in March 2023 to 15,109 sqm six months later.<\/p>\n\n\n\n

\u201cManagement continues to focus on reducing vacancies, with the overall vacancy of 17.0%,\u201d it said.<\/p>\n\n\n\n

An analysis of Fourways Mall\u2019s finances shows why the shopping mall is in such deep trouble and needs an intervention.<\/p>\n\n\n\n

Following the expansion, Fourways Mall\u2019s gross lettable area (GLA) increased from 61,634 square meters in 2019 to 88,785 square meters.<\/p>\n\n\n\n

However, a lot of the additional gross lettable area is standing empty because of the low occupancy rate.<\/p>\n\n\n\n

The net rent per square meter declined from R298 in 2020 to R262 in 2023. This decline is devastating to a property owner faced with increasing costs.<\/p>\n\n\n\n

Fourways Mall\u2019s fair value declined from R4.8 billion in 2020 to R4.02 billion three years later. This is bad news for the property owners, who are losing money.<\/p>\n\n\n\n

Warning from Jean-Pierre Verster<\/h2>\n\n\n\n
\"\"<\/a>
Protea Capital Management founder and CEO Jean Pierre Verster <\/figcaption><\/figure>\n\n\n\n

The company\u2019s problems go beyond Fourways Mall. Protea Capital Management founder and CEO Jean-Pierre Verster highlighted some of the issues.<\/p>\n\n\n\n

He said the company had a \u201ccolourful history\u201d and that the fund is involved with something that always raises red flags \u2013 material related-party transactions.<\/p>\n\n\n\n

These are transactions between two business parties with a pre-existing relationship that forms more than 10% of the company\u2019s turnover.<\/p>\n\n\n\n

Verster said the property fund bought properties from companies owned by its founder, including Fourways Mall.<\/p>\n\n\n\n

Verster doesn\u2019t agree with these business practices, which is why he had short positions on the stock in the past.<\/p>\n\n\n\n

Red flags were also raised earlier this year when Investec became a major shareholder in Accelerate through an odd series of events.<\/p>\n\n\n\n

On 21 May 2024, Accelerate released a SENS announcement that Investec had acquired a beneficial interest in the company\u2019s shares.<\/p>\n\n\n\n

The acquisition was pursuant to a lending arrangement and that Investec now owns 8.02% of the company.<\/p>\n\n\n\n

Shortly after this announcement, Accelerate announced that its director, Michael Georgiou, sold 107 million of the company\u2019s shares at an average price of 53 cents.<\/p>\n\n\n\n

While no additional information was provided on why these shares were sold, it can be assumed that Investec acquired Georgiou\u2019s shares linked to a lending transaction.<\/p>\n\n\n\n

In other words, Georgiou defaulted on a loan to Investec, and, as a result, Investec acquired over 8% ownership of Accelerate Property Fund.<\/p>\n","protected":false},"excerpt":{"rendered":"

Accelerate Property Fund, which owns South Africa\u2019s largest shopping centre, Fourways Mall, is facing significant difficulties.<\/p>\n","protected":false},"author":10,"featured_media":779249,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12755],"tags":[19940,19746,19967,175],"class_list":["post-782961","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property","tag-accelerate-property-fund","tag-fourways-mall","tag-jean-pierre-verster","tag-jse"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/782961","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=782961"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/782961\/revisions"}],"predecessor-version":[{"id":782962,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/782961\/revisions\/782962"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/779249"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=782961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=782961"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=782961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}