Owner of Fourways Mall, the Accelerate Property Fund (AFP), has recorded a massive R1.27 billion loss for the year ended 31 March 2025, doubling the loss recorded in 2024.

According to the group, the loss is mainly due to a significant increase in its expected credit losses (ECL) allowance, which surged by 560% to R1 billion.

This relates to likely impairments from a lapsed deal with Fourways Mall co-owner, Michael Georgiou and his investment vehicle Azrapart.

In 2024, Accelerate and various entities reached an agreement to restructure debts owed to it all to fall collectively under Azrapart, totalling just under R800 million.

To settle the debt, the group reached an agreement to balance it to R0 through reverse claims, future investment and acquiring shares of bulk development space owned by Azrapart.

However, the agreement lapsed in November 2024, and AFP warned in June 2025 that the full amount may not be recoverable and may have to be impaired.

The group said that Georgiou has not yet signed a new agreement, and it will use whatever resources it has at its disposal to recover the debt. However, it admitted there were legal uncertainties around this.

Crucially, Azrapart was placed in business rescue earlier this year, placing the recoverability of these debts in extreme doubt.

Unfortunately for the group, the situation has compounded its losses and pushed its comprehensive loss for the year to R1.27 billion.

Looking at the group’s wider finances, rental income decreased by R37.3 million from R646.5 million in 2024 to R609.2 million in 2025.

Disposals accounted for R50.7 million of the decrease, with the Fourways Mall headlease having a positive impact of R61.8 million.

The remainder of the decrease was largely due to reversions in rental income in Fourways Mall, the group said.

Fair value adjustments in its portfolio of negative R319 million were also made. The group remains solvent with total assets at R7.8 billion against total liabilities of R4.3 billion.

Fourways Mall remains the largest asset in its portfolio, with AFP’s 50% share valued at R4 billion, valuing the mall at R8 billion.

The group also recorded improvements at the mall, particularly with its vacancy rate dropping year-on-year from 19% at FY 2024 to 13.7% at FY 2025.

This followed an “aggressive drive to attract new tenants”, it said, while new management and cash injections are said to be yielding results.

Outlook

AFP attributed its struggles to the wider economic climate in South Africa, saying that the country “faces a complex array of geopolitical and economic headwinds, shaped by domestic challenges and global developments”.

It blamed domestic challenges like infrastructure deficiencies and underinvestment, rising public debt and increased unemployment as critical factors.

It also added in strained relations with the United States, sluggish global growth and growing geopolitical conflicts.

“This environment forces us to rethink how we effectively allocate capital, while operating in an environment of higher operating costs and a very competitive rental market,” it said.

However, despite all the headwinds, the group said that it will continue to focus on its strategic objectives, like optimising its balance sheet through disposals.

It said this is a key strategic focus to reduce its debt.

To this end, during the year under review, the group successfully disposed of eight assets with a combined GLA of 63,284m² for a cumulative amount of R694 million (net of selling costs).

After the reporting date, it received proceeds from the disposal of other assets of R62.4 million, and sale agreements for a further four properties were concluded to the value of R688.5 million.

No dividend was declared.

Source: BusinessTech.co.za