JSE-listed real estate investment trust Accelerate Property Fund on Monday concluded an agreement with Fourways Precinct to secure a 50% undivided share in the imminent supermall development in the Northern Johannesburg suburbs.
A 2013 agreement between Accelerate and Fourways Precinct allowed either party to expand its undivided shares upon completion of the development of the R2-billion, 90 000 m² expansion and refurbishment of Fourways Mall to ensure equal ownership in the redeveloped mall based on a capitalisation rate of 7%.
It was initially anticipated that the relative split between the parties on completion of the expanded 170 000 m² Fourways Mall would be 60:40 in favour of Fourways Precinct.
Accelerate had now concluded a R700-million agreement with Fourways Precinct to exercise the option to acquire that percentage undivided share early, resulting in the fund holding a 50% undivided share post development.
Further, Fourways Precinct would sell the development rights to Eriologix subsidiary Azrapart, ceding certain rights and obligations in respect of the development rights, the Fourways development sale agreement and its ownership, to Azrapart.
Fourways Precinct would, at its own cost, undertake fundamental infrastructure and traffic upgrades to significantly improve access to the Fourways Mall shopping centre.
In addition, Fourways Precinct, Azrapart and Accelerate would enter into a head lease for the existing buildings situated on the development land and the new buildings under development.
The lease would see Fourways Precinct lease any vacant premises from Azrapart and Accelerate for a period of five years from the date of the development’s completion.
The acquisition remained subject to approval by competition authorities, shareholders and the companies’ boards, besides other conditions precedent.