Accelerate Property Fund, a Real Estate Investment Trust (REIT) listed on the Johannesburg Stock Exchange, has agreed to sell KPMG Crescent and its associated parkade in Parktown, Johannesburg, to Rand Mutual Assurance Company for R385 million ($23.62 million), as part of its ongoing restructuring and debt-reduction strategy.

Under the agreement, Rand Mutual Assurance will acquire 100% of the issued shares in Wanooka Properties, a wholly owned subsidiary of Accelerate and the entity that owns KPMG Crescent and the parkade at 85 Empire Road. The transaction will be settled in cash upon the transfer of the shares. Accelerate plans to use the majority of the proceeds to reduce its debt.

Accelerate to receive $23 million net of property expenditure

Accelerate has agreed to spend approximately R15 million ($919,742) on maintenance and capital improvements at KPMG Crescent on behalf of the purchaser, reducing the purchase price to R370 million ($22.69 million) before broker commissions.

The company will also pay R10.5 million ($643,684) in broker commissions as part of the transaction. The transaction remains subject to unconditional approval from South Africa’s Competition Authority. It has been classified as a Category 2 transaction under the JSE Listings Requirements and therefore does not require shareholder approval.

KPMG Crescent valued at $24 million

Located at 85 Empire Road in Parktown, Johannesburg, KPMG Crescent is an office property with a gross lettable area of 20,096 square metres. The property was valued at R393 million ($24.09 million) as of March 31, 2026, according to an external valuation by Mills Fitchet Valuations. The valuation was based on cash flows and forward net income generated by the property.

The property has a weighted average gross rental of R99.52 ($6.09) per square metre. For the year ended March 31, 2026, KPMG Crescent generated net operating income of approximately R100.8 million ($6.18 million), excluding straight-line rental income adjustments.

The company said the above-market net income was supported by a long-term lease with KPMG that had escalated at 8% annually over 12 years. The gross rental under the lease reverted to R99.52 ($6.09) per square metre on September 1, 2026. As part of the transaction, Wanooka and KPMG have agreed that the existing lease will end on April 30, 2027.

Disposal forms part of Accelerate’s restructuring

Accelerate Property Fund said the disposal forms part of its broader strategic repositioning and restructuring programme.

The transaction will transfer ownership of the property to Rand Mutual Assurance, a mutual assurance company owned and operated for the benefit of its policyholders, while providing Accelerate with cash to strengthen its balance sheet through debt reduction.

The transaction is expected to become effective on the date the shares in Wanooka are transferred to Rand Mutual Assurance.