Accelerate Property Fund takes earnings hit as it struggles to fill space

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Accelerate’s distributable earnings decline 10.8% on ‘unfavourable economic conditions’

Fourways Mall. Picture: JEREMY GLYN

“The fund has experienced considerable income pressure on a number of fronts,” it said on Thursday, citing higher administered prices and finance costs, and pressure on rentals. Accelerate said while it reduced vacancies to 9%, from 10% a year before, “this came at a cost, including softer rentals to retain tenants, rent-free periods and tenant installations”.

But the landlord’s fundamentals remained intact, Costa said, citing a tenant-retention rate of 86%, lease escalations of above 7%, and a weighted average lease expiry of more than 5%. The mall could catalyse the Fourways area just as Sandton City had catalysed that precinct, Accelerate said. “However, given SA’s cloned tenant mix and over-supply of formal retail space, a relevant, high quality tenant mix with both convenience and ‘Shoppertainment’ offerings will be paramount to the success of the mall,” said Eichstadt.

 

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