Key Points:
- Michael Georgiou offloaded $3.1 million in Accelerate Property Fund due to loan obligations.
- This reduced Georgiou’s stake in Accelerate from 29 percent to 21 percent.
- Georgiou’s recent transaction highlights complexities of finance and property management in South Africa.
South African real estate mogul Michael Georgiou who owns one of the largest private property portfolios in South Africa, was compelled to offload a portion of his holdings in the Accelerate Property Fund earlier this month. The sale involved shares valued at R56.9 million ($3.1 million) and was necessitated by financial obligations under a pre-existing lending arrangement.
According to a statement released by the Accelerate Property Fund, Georgiou sold 107 million shares, which were subsequently seized by Investec. This Anglo-South African banking and wealth management giant, led by Fani Titi, exercised its security rights as per an existing lending agreement, triggering the forced sale. The shares were disposed of at an average price of R0.53 ($0.029) per share.
This transaction has significantly impacted Georgiou’s stake in the fund, reducing his shareholding from 29 percent to 21 percent as of April 12. Despite this reduction, Georgiou remains a substantial stakeholder in the company, which is currently raising R200 million ($11 million) through a rights offer to finance upgrades and reposition Fourways Mall, one of its flagship properties.
Investec secures 8 percent stake in AccelerateÂ
The Accelerate Property Fund, listed on the Johannesburg Stock Exchange (JSE), prides itself on a portfolio of premium properties featuring long-term leases with robust tenants. The fund’s assets include prominent properties such as Cedar Square, The Buzz, Waterford, BMW Fourways, and 50 percent of the super-regional Fourways Mall.
Additionally, it owns strategic buildings in Cape Town’s Foreshore area, such as the Oceana Building, the Mustek Building, the Thomas Pattullo Building, and the Portside Building, as well as key properties in Sandton’s Charles Crescent.
Investec’s 8 percent stake in Accelerate through this transaction underscores its confidence in the fund’s strategic vision and asset quality. The move aligns with Accelerate’s aspirations to become the most valued property fund on the JSE, focusing on acquiring high-quality properties with long-term lease agreements.
Michael Georgiou’s share sale highlights market dynamics
Michael Georgiou’s career in real estate spans over two decades, during which he has developed and acquired over a hundred properties across South Africa. As a director at Accelerate since 2013, he has managed an extensive portfolio that includes over 1,200 tenants and a total gross lettable area of approximately 440,520 square meters.
This forced share sale, while a setback for Georgiou, highlights the complex interplay of finance and property management in South Africa’s dynamic real estate market. As Accelerate Property Fund continues to pursue its growth and enhancement initiatives, stakeholders will be closely watching the implications of this transaction on the fund’s performance and strategic direction.
