Real estate investment trust, Accelerate Property Fund (APF) is in talks to sell its portion of the lower nine floors of the tallest building in the Cape Town CBD, Portside Tower, as well as four other properties in a bid to reduce its debt and ease financial strain.
Source: Accelerate Property Fund.
FNB released a statement this week discounting public claims that the entire Portside Tower was up for sale, and said it remained committed as the building's anchor tenant.
The tower stands at 136m and comprises 30 floors.
FNB could not confirm the rand value of APF's Portside Tower stake.
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.
As of now, APF has not revealed the identities of the potential buyers of all the assets in question or the specific terms of the sale.
Debt-reduction strategy
As 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 office in Sandton.
This article has been updated on Wednesday, 29 January 2025 to provide a more accurate reflection of the facts regarding Accelerate Property Fund's sale of its portion of the lower nine floors of Portside Tower.
