{"id":834493,"date":"2025-08-08T18:45:16","date_gmt":"2025-08-08T16:45:16","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=834493"},"modified":"2025-08-09T08:01:56","modified_gmt":"2025-08-09T06:01:56","slug":"massive-r1-27-billion-loss-for-owner-of-south-africas-biggest-shopping-mall","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/property\/834493\/massive-r1-27-billion-loss-for-owner-of-south-africas-biggest-shopping-mall\/","title":{"rendered":"Massive R1.27 billion loss for owner of South Africa\u2019s biggest shopping mall"},"content":{"rendered":"\n

Owner of Fourways Mall, the Accelerate Property Fund (AFP), has recorded a massive R1.27 billion loss for the year ended 31 March 2025, doubling the loss recorded in 2024.<\/p>\n\n\n\n

According to the group, the loss is mainly due to a significant increase in its expected credit losses (ECL) allowance, which surged by 560% to R1 billion.<\/p>\n\n\n\n

This relates to likely impairments from a lapsed deal<\/strong><\/a> with Fourways Mall co-owner, Michael Georgiou and his investment vehicle Azrapart.<\/p>\n\n\n\n

In 2024, Accelerate and various entities reached an agreement <\/strong><\/a>to restructure debts owed to it all to fall collectively under Azrapart, totalling just under R800 million.<\/p>\n\n\n\n

To settle the debt, the group reached an agreement to balance it to R0 through reverse claims, future investment and acquiring shares of bulk development space owned by Azrapart.<\/p>\n\n\n\n

However, the agreement lapsed in November 2024, and AFP warned in June 2025 that the full amount may not be recoverable and may have to be impaired.<\/p>\n\n\n\n

The group said that Georgiou has not yet signed a new agreement, and it will use whatever resources it has at its disposal to recover the debt. However, it admitted there were legal uncertainties around this.<\/p>\n\n\n\n

Crucially, Azrapart was placed in business rescue earlier this year, placing the recoverability of these debts in extreme doubt.<\/p>\n\n\n\n

Unfortunately for the group, the situation has compounded its losses and pushed its comprehensive loss for the year to R1.27 billion.<\/p>\n\n\n\n

Looking at the group’s wider finances, rental income decreased by R37.3 million from R646.5 million in 2024 to R609.2 million in 2025. <\/p>\n\n\n\n

Disposals accounted for R50.7 million of the decrease, with the Fourways Mall headlease having a positive impact of R61.8 million. <\/p>\n\n\n\n

The remainder of the decrease was largely due to reversions in rental income in Fourways Mall, the group said.<\/p>\n\n\n\n

Fair value adjustments in its portfolio of negative R319 million were also made. The group remains solvent with total assets at R7.8 billion against total liabilities of R4.3 billion.<\/p>\n\n\n\n

Fourways Mall remains the largest asset in its portfolio, with AFP’s 50% share valued at R4 billion, valuing the mall at R8 billion.<\/p>\n\n\n\n

The group also recorded improvements at the mall, particularly with its vacancy rate dropping year-on-year from 19% at FY 2024 to 13.7% at FY 2025.<\/p>\n\n\n\n

This followed an “aggressive drive to attract new tenants”, it said, while new management and cash injections are said to be yielding results.<\/p>\n\n\n\n

Results<\/h2>\n\n\n\n
Indicator<\/th>31 Mar 2024
(R’000)<\/th>		31 Mar 2025
(R’000)<\/th>		Y\/Y change
(R’000)<\/th>		Y\/Y change
(%)<\/th><\/tr><\/thead>
Rental Income including recoveries<\/td>873 615<\/td>824 036<\/td>(49 579)<\/td>(5.7%)<\/td><\/tr>
Net Property Income<\/td>539 699<\/td>494 737<\/td>(44 962)<\/td>(8.3%)<\/td><\/tr>
Fair Value Adjustments<\/td>(396 338)<\/td>(318 945)<\/td>77 393<\/td>19.5%<\/td><\/tr>
Expected Credit Loss<\/td>(158 093)<\/td>(1 046 461)<\/td>(888 368)<\/td>561.9%<\/td><\/tr>
Loss after Tax<\/strong><\/td>(624 738)<\/strong><\/td>(1 269 635)<\/strong><\/td>(644 897)<\/strong><\/td>103.2%<\/strong><\/td><\/tr>
Loss per share<\/td>(48.21)<\/td>(74.29)<\/td>(26.1)<\/td>54.1%<\/td><\/tr>
Headline loss per share<\/td>(20.34)<\/td>(58.24)<\/td>(37.9)<\/td>186.4%<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n

Outlook<\/h2>\n\n\n\n

AFP attributed its struggles to the wider economic climate in South Africa, saying that the country “faces a complex array of geopolitical and economic headwinds, shaped by domestic challenges and global developments”.<\/p>\n\n\n\n

It blamed domestic challenges like infrastructure deficiencies and underinvestment, rising public debt and increased unemployment as critical factors.<\/p>\n\n\n\n

It also added in strained relations with the United States, sluggish global growth and growing geopolitical conflicts.<\/p>\n\n\n\n

“This environment forces us to rethink how we effectively allocate capital, while operating in an environment of higher operating costs and a very competitive rental market,” it said.<\/p>\n\n\n\n

However, despite all the headwinds, the group said that it will continue to focus on its strategic objectives, like optimising its balance sheet through disposals.<\/p>\n\n\n\n

It said this is a key strategic focus to reduce its debt.<\/p>\n\n\n\n

To this end, during the year under review, the group successfully disposed of eight assets with a combined GLA of 63,284m\u00b2 for a cumulative amount of R694 million (net of selling costs).<\/p>\n\n\n\n

After the reporting date, it received proceeds from the disposal of other assets of R62.4 million, and sale agreements for a further four properties were concluded to the value of R688.5 million.<\/p>\n\n\n\n

No dividend was declared.<\/p>\n","protected":false},"excerpt":{"rendered":"

Owner of Fourways Mall, the Accelerate Property Fund (AFP), has recorded a massive R1.27 billion loss for the year ended 31 March 2025, doubling the loss recorded in 2024.<\/p>\n","protected":false},"author":10,"featured_media":774229,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12755],"tags":[19940,19746],"class_list":["post-834493","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property","tag-accelerate-property-fund","tag-fourways-mall"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834493","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=834493"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834493\/revisions"}],"predecessor-version":[{"id":834495,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834493\/revisions\/834495"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/774229"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=834493"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=834493"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=834493"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}