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ACCELERATE PROPERTY FUND LIMITED

APF JSE Listed

Investment Analysis: Accelerate Property Fund Limited (JSE: APF)

Date: 10 January 2026 Share Price: ~R0.59 (59c) Analyst Role: Senior Equity Analyst, JSE

Step 1: Data Gathering & Source Verification

I have reviewed the most recent financial disclosures and SENS announcements, focusing on the critical restructuring efforts and the Fourways Mall turnaround strategy.

  • Interim Results: Reviewed the Unaudited Interim Consolidated Condensed Financial Results for the six months ended 30 September 2025 (Released 1 December 2025).
  • Annual Financial Statements: Reviewed the Integrated Report for the year ended 31 March 2025 (Released 29 August 2025).
  • SENS Activity (L12M): Key announcements include the Rights Offer Results (July 2025), the disposal of non-core assets (Portside, The Buzz, Waterford Centre) in late 2025, and the opening of Walmart at Fourways Mall (November 2025).

Data Sources:

  • Interim Results (Dec 2025): https://senspdf.jse.co.za/documents/SENS_20251201_S514231.pdf
  • Rights Offer Circular: https://www.acceleratepf.co.za/pdf/apfcir30may25.pdf

Step 2: Metric Extraction

| Metric | Value | Notes | | --- | --- | --- | | Market Cap | ~R1.23 Billion | Small-cap REIT, trading in "penny stock" territory post-dilution. | | Dividend Yield (L12M) | 0.0% | Suspended. No dividends declared. The fund is in a "capital retention" phase to reduce debt and fund Fourways Mall capex. | | Liquidity Check | Moderate/Speculative | Average daily volume is sporadic. While some days see >200k shares traded, it is often illiquid. High Risk: Large exits can crash the price. | | P/E Ratio | ~5.9x (Annualised) | Distressed Value. Based on H1 2026 HEPS of 5.01 cents (annualised ~10c). The low multiple reflects the high debt risk and lack of dividends. | | Net Asset Value (NAV) | ~203 cents | Massive Discount. The stock trades at a ~71% discount to NAV (Price 59c vs NAV 203c). This deep discount signals that the market does not believe the book value of its properties (specifically Fourways Mall) is realizable. | | LTV Ratio | ~41.8% (Pro-forma) | Improving but High. Down from >47% following the rights offer and disposals (Portside, etc.). Management is targeting <40% to stabilize the balance sheet. |

Step 3: Operational & Strategic Analysis

Business Overview Accelerate Property Fund is a REIT dominated by a single mega-asset: Fourways Mall (50% ownership).

  • The Problem: The fund became over-geared due to the Fourways Mall expansion just before COVID-19. The mall suffered from high vacancies and a confusing layout.
  • The Fix: A massive restructuring plan involving asset sales (Cape Town offices, non-core retail) to pay down debt, and a "Rights Offer" to fund CAPEX for the mall.

Performance Trend

  • The Turnaround: The September 2025 interims showed the first real "green shoots."
  • Vacancies: Dropped significantly to 15.1% (from 21.7% in 2024). Crucially, Fourways Mall vacancies fell to 10.7% (from 17.9%).

  • Walmart Anchor: The opening of Walmart in Fourways Mall (28 November 2025) was a strategic coup, driving footfall and replacing lost tenants (Game).

  • Disposals: Management successfully sold Portside, The Buzz, and Waterford Centre, raising >R500m to deleverage. This execution capability has restored some market credibility.

  • Earnings: Basic HEPS returned to profit (5.01 cents) compared to a loss in the prior period, driven by lower finance costs (post-rights offer) and better collections.

Sector Context

  • Retail Polarization: Super-regional malls (like Fourways) are fighting for dominance. The entry of Walmart positions Fourways as a "Value" destination, broadening its appeal beyond just "Premium" shoppers.
  • Interest Rates: As a highly geared entity, Accelerate is the biggest beneficiary of any rate cuts in 2026. Every 50bps cut significantly boosts their distributable income.

Step 4: The Verdict

Bull Case (Why Buy): The "Deep Value" Turnaround. You are buying R2.00 of assets for 59 cents. If the Fourways Mall turnaround works (and the Walmart opening suggests it is working), the stock could double and still trade at a discount to NAV. The rights offer risk is now behind us; the dilution has happened. The disposals have removed the immediate threat of a covenant breach. This is a classic "Phoenix" play for high-risk tolerance investors.

Bear Case (Why Sell): The "Binary" Risk. Accelerate is effectively a proxy for Fourways Mall. If the mall fails to regain its dominance against competitors (Mall of Africa, Sandton City), the fund fails. The LTV of ~42% is still too high for comfort in a high-rate environment. With zero dividends likely for another 12-18 months, there is no "carry" while you wait.

Fair Value Estimate: R0.90 - R1.00 Implies narrowing the discount to NAV to ~50%, assuming the Fourways Mall vacancies stabilize below 10%.

Final Rating: SPECULATIVE BUY Strictly for investors who understand that this is a turnaround bet. The fundamentals are improving, but the debt load remains the primary risk.

AI Generated Analysis Last Updated: 2026-01-14