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South Africa's crown jewel of retail, Fourways Mall, is currently navigating through choppy financial waters. Despite its prime location and significant footprint, the mall has seen a troubling rise in vacant shopfronts, casting a shadow over its once-booming presence. Owned 50% by Accelerate Property Fund (APF), the mall's poor performance has necessitated fundraising to salvage the sinking retail giant.
The downturn has been stark, with an alarming spike in the vacancy rate from a mere 3% in 2021 to an unsettling 8% in 2023. The implication of these numbers reflects fiercely on the mall's earnings, with the net rent per square meter plummeting from R298 in 2020 to R262 by 2023. To paint a grimmer picture, Accelerate's anticipated gross rent for 2024 is alarmingly cited at R223, signaling distress in no uncertain terms.
This economic struggle has inflicted a blow on the mall’s assessed worth, compelling Accelerate to write down their share by R900 million over the past four years, from R4.8 billion to the current R3.9 billion. The financial strain cascades, influencing Accelerate Property Fund's bottom line, with revenues dwindling from R1.2 billion in 2019 to R819 million in 2024.
Boardroom shifts occur as Michael Georgiou, an Accelerate director and shareholder, grapples with financial challenges, leading to Investec's escalated shareholding. Ride the waves of change as Georgiou offloads 107 million company shares, with Investec possibly seizing them consequent to defaulted loan arrangements, hence claiming an 8.02% stake in Accelerate.
The road to recovery is, however, charted. A revitalization strategy spearheaded by Flanagan & Gerard and property managers Moolman Group aims to reinvigorate the humbled mall. The blueprint envisions improved wayfinding, an ensemble of new tenants, supplemental backup power solutions, enhanced security and lighting in parking zones, and reformed traffic and parking space configurations.
Recent improvements exhibit the commitment to this new path, with Fourways Mall unveiling a revamped taxi holding area to ease congestion and foster a safer and quicker transit access for commuters. Nestled in the basement under Pick n Pay, this transport hub boasts not only better taxi accessibility but also enhanced retail offerings to enrich the commuter experience.