By Chinasaokwu Helen Okoro
A total of R1.8bn of the debt comes from the DMTN programme, while an additional R1.2bn is owed to Rand Merchant Bank (a part of FirstRand)Accelerate Property Fund (APF), a leading real estate investment trust, is in talks to sell Portside Tower and four other properties in a bid to reduce its debt and ease financial strain.
Portside Tower, which is expected to sell for just over R600m, is located in Cape Town’s CBD and is the city’s tallest building.
With FNB as its anchor tenant, it stands at 136m with 30 floors.
This iconic structure offers approximately 50,000m² of office space and is renowned for its 5-star Green Building Council of South Africa rating.
The building offers various office sizes. Its tenth floor features a balcony with views of Table Mountain and the Atlantic Foreshore.
The building also boasts amenities such as a professionally equipped staff restaurant and wellness centre.
Other properties sold
Other Cape Town properties being sold by APF include the Oceana Group’s head office in the Foreshore, along with the nearby Thomas Pattullo building.
The valuations of these assets were not included in APF’s interim results for the six months to 30 September, published the day before Christmas Eve.
In Johannesburg, the company is also selling The Buzz Shopping Centre and the adjacent Waterford Centre in Fourways, with expected proceeds from these two sales totalling around R215m.
The sale of these assets alone, minus that of the Oceana Group’s head office and the Thomas Pattullo building, is projected to raise around R985m.
It’s important to note, however, that Accelerate has revised the fair value of the five properties it is selling, increasing the total by R153m.
This means the valuations of these assets exceed their current market price.As of now, APF has not revealed the identities of the potential buyers or the specific terms of the sale.
Debt-reduction strategyAs of the end of September 2024, APF had a net debt of R3.7bn.
The majority of this debt (R3.3 bn) is set to mature on 31 March 2025, with some notes from the JSE’s domestic medium-term note (DMTN) programme expiring at the end of February.
A total of R1.8bn of the debt comes from the DMTN programme, while an additional R1.2bn is owed to Rand Merchant Bank (a part of FirstRand).
The fund has stated that discussions to renew these facilities are already underway to extend them for a further period.
Following these sales, the company will hold on to just five of its top 10 properties: Fourways Mall, Cedar Square, BMW Fourways, Bosveld Mall in Bela-Bela, and the Citibank head officein Sandton.
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