Big changes for the owner of South Africa’s biggest shopping mall

Accelerate Property Fund has signed a new management agreement for Fourways Mall, which could significantly reduce its stake in South Africa’s biggest mall.

The new agreement comes shortly after the JSE imposed a public censure and a R500,000 fine on Accelerate for failing to obtain the correct shareholder approval for a previous management agreement.

On Monday, 28 September, Accelerate announced that it has now signed a new agreement for Fourways Mall.

This new agreement is between Accelerate, its co-owner, Azrapart, and property managers Flanagan & Gerard (F&G) and Luvon Investments.

Since Azrapart is currently in business rescue, its business rescue practitioners signed the deal on the company’s behalf.

Currently, Accelerate and Azrapart co-own Fourways Mall, owning a 50% stake valued at R4.2 billion each, with the mall’s total value being R8.4 billion.

F&G and Luvon have been running Fourways Mall since 1 February 2024, and have been instrumental in the mall’s turnaround over the past two years.

Under their management, Fourways Mall has seen its vacancy rate drop from 18.8% to 6.6%, with monthly tenant turnover rising from R226.3 million to R365.2 million.

The shopping centre has also seen footfall improve, going from 1.07 million to 1.39 million visitors.

During this turnaround, F&G and Luvon were running the mall under a management contract that lapsed due to unfulfilled conditions, which relates to the JSE’s censure and fine.

However, this new agreement will formalise their appointment for five years, backdated to 1 February 2024, and is subject to shareholder approval.

Since the managers and Azrapart are related parties, Accelerate shareholders must vote to approve the deal and the potential share transfer that goes with it.

The deal is likely to be approved, as Accelerate said that a key shareholder holding 50.7% of the company’s shares has already pledged to vote in favour of the new agreement.

Under the new deal, the managers will receive standard monthly fees based on gross revenue and 2.5% on approved capital projects.

They will also be entitled to a performance bonus at the end of the agreement if Fourways Mall hits certain profit targets.

Crucially, the managers can choose to receive this performance bonus either in cash or as an undivided ownership stake in Fourways Mall.

On top of this, F&G and Luvon also hold an option to buy up to an additional 15% share in Fourways Mall at market value.

This could result in Accelerate’s stake in Fourways Mall, its crown jewel asset, declining significantly.

As of its 2026 financial year, Accelerate’s investment property portfolio was valued at R6.6 billion.

This means its 50% stake in Fourways Mall, valued at R4.2 billion, accounts for 63.64% of the group’s investment property portfolio.