GEORGE NEWS - The Sasol Pension Fund has expressed interest to acquire Eden Meander Lifestyle Centre from Accelerate Property Fund at an expected minimum price of about R521m.
This is according to an announcement made by Accelerate on the Stock Exchange News Service (Sens) on 23 August.
The acquisition will include a vacant piece of land of 7 094m² on erf 26832, next to the centre. The price is to be equal to 7,5% of the net operating income capitalised for 12 months from 1 December 2023.
Accelerate says the final purchase price will be determined following the due diligence investigation. The transaction is expected to be finalised in November, when the property transfer takes place.
The shopping centre property measures 1 072 502m² with 31 136m² gross lettable space. It was acquired by Accelerate in October 2016 and forms part of the company's retail portfolio.
Accelerate states, "In line with the company's stated intention of strengthening its financial position by improving the interest cover ratio (ICR), partly through the disposal of assets, the board of directors has resolved to dispose of Eden Meander, which will have a significant impact on the ICR level.
"While this decision was not taken lightly, we believe that it is in the best interest of the company and its shareholders. Since year-end, the company disposed of the Ford Fourways and Leaping Frog (transfer imminent), which reduced the LTV (loan-to-value) by 1,2% and improved the ICR by 0,1 times. The disposal of Eden Meander will further reduce the LTV by 3,0% and result in a meaningful further improvement in the ICR."
The transaction is subject to, among others, the satisfactory outcome of a due diligence investigation of the property, Competition Commission approval, and approval of Sasol Pension Fund's Investment Committee, as well as Accelerate shareholder approval.
Eden Meander's net rental income is R131,40/m² and it had a vacancy rate of 0,35% as at 31 March. The net operating income for the year ended 31 March 2023 was R38,5m, according to the Sens announcement.
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