Accelerate Property Fund posts $71.5 loss amid related-party debt impairment

At a Glance

• Related-party debt impairment drives R1.27 billion ($71.5 million) loss, deepening challenges for Johannesburg-listed REIT.
• Asset disposals cut loan-to-value ratio to 48.3%, easing balance sheet pressure.
• Fourways Mall vacancy drops to 13.7% after targeted tenant acquisition efforts.

Accelerate Property Fund, the Johannesburg-listed real estate investment trust (REIT), reported a sharp loss of R1.27 billion ($71.5 million) for the year ended March 31, 2025, as a substantial related-party debt impairment and softer rental income weighed on results.

The fund faced an exceptionally challenging operating environment marked by higher vacancies, competitive rental pressures, and macroeconomic headwinds, but continued to execute on its disposal-led balance sheet optimisation strategy.

Loss deepens on related-party impairment
According to its audited results, the group posted a loss after tax of R1.27 billion ($71.5 million), more than double the R624.74 million ($35.18 million) loss recorded a year earlier.

The decline was driven largely by a R970.7 million ($54.7 million) impairment of related-party debt, which contributed to a 561.9-percent surge in expected credit losses to R1.05 billion ($59.13 million).

Rental income, including recoveries, fell 5.7 percent to R824 million ($46.41 million), with property disposals accounting for most of the drop. Net property income declined 8.3 percent to R494.7 million ($27.86 million), reflecting reversions in Fourways Mall and competitive rental dynamics.

The fund’s SA REIT Funds from Operations per share swung deeper into negative territory, at a loss of 3.97 cents compared to a 0.72 cent loss last year, leading the board to withhold a dividend for the second consecutive year.

Debt reduction through asset disposals
Accelerate accelerated its debt-reduction programme, disposing of eight properties with a combined gross lettable area of 63,284m² for R694 million, using the proceeds to settle borrowings. Post year-end, two additional assets were transferred for R62.4 million ($3.52 million), while agreements were concluded for four more properties worth R688.5 million ($38.84 million).

These transactions helped reduce the group’s loan-to-value ratio to 48.3 percent from 50.3 percent a year earlier. Net finance costs fell 42.3 percent to R272 million, aided by disposals, a cap on interest rates at 7.75 percent, and new swap agreements, including an R2 billion ($112.79 million) post-year-end hedge at 7.38 percent.

Vacancies improved to 19.4 percent from 21.1 percent, with Fourways Mall occupancy strengthening to 86.3 percent following targeted tenant acquisition efforts. The weighted average rental across the portfolio eased to R184.7/m² from R207.8/m², reflecting reversions.

Capital structure focus and outlook
Management extended all facilities and notes to March 2027, subject to milestones including a fully underwritten R100 million ($5.64 million) rights offer concluded in July 2025. The group continues to prioritise strategic disposals and settlement of related-party debt to strengthen its balance sheet.

CEO Michael Georgiou said the fund remains committed to reshaping its portfolio for resilience. “We are navigating a highly competitive and cost-intensive market, but our disposal and debt-reduction strategies are yielding tangible improvements in our capital structure,” he said.

Founded in 2005, Accelerate has built a retail-focused portfolio anchored by flagship assets such as Fourways Mall. With capital recycling and tighter financial discipline, the REIT is positioning itself to restore growth and enhance shareholder value despite prevailing economic challenges.