Wrap Text
Consolidated Financial Results for the Year Ended 31 March 2019
ACCELERATE PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration No 2005/015057/06)
JSE code: APF ISIN code: ZAE000185815
Bond code: APFE
(REIT status approved)
("Accelerate" or "the company")
CONSOLIDATED FINANCIAL RESULTS
For the year ended 31 March 2019
PROPERTY PORTFOLIO VALUE OF R 12,7 billion
TOTAL PORTFOLIO GLA OF 601 506 m2
KEY INDICATORS
Indicator 2019 2018
Distribution per share 50,97 57,55
Portfolio value R12,7 billion R12,3 billion
GLA 601 506 m2 623 988 m2
Number of properties 62 67
Net asset value 8,0 billion 7,8 billion
Cost to income ratio*** 15,9% 14,8%
Weighted average lease expiry 5,3 years 5,5 years
Lease escalations (excluding offshore)* 7,4% 7,7%
Vacancies** 9,00% 10,04%
Listed/large national tenants (by revenue) 65,7% 65,7%
* 6,6% including offshore (2018: 7,1%).
** Excludes properties earmarked for development.
***Excludes abnormal expenses incurred due to the Fourways Mall development.
PORTFOLIO OPTIMISATION
Accelerate continues to focus on its portfolio optimisation strategy. Through targeted property sales of non-core assets
the fund is making headway in reducing gearing levels to its target level of 35% pre-equalisation. This strategy has the
dual benefit of creating funding capacity for the Fourways equalisation (discussed below) and, by selling non-core assets,
the remaining portfolio is underpinned by quality assets, including:
- 50% Fourways Mall (super-regional retail)
- Cedar Square (regional retail)
- Eden Meander (regional retail)
- Significant other convenience retail presence in the Fourways node
- KPMG's South African head office (A-grade office)
- Citibank's South African head office (A-grade office)
- Portside (P-grade office)
- Offshore portfolio (75% Austria by revenue)
- Charles Crescent (development opportunity)
- Foreshore office (development opportunity)
FINANCIAL PERFORMANCE
The South African economic environment remains challenging. Unfavourable economic conditions continue to weigh heavily on
property fundamentals and, in our view, the property sector will remain under pressure during 2019. Recent retailers'
results echo these sentiments, with consumers' disposable income still under pressure and overall business sentiment poor.
Despite a number of ongoing initiatives to reduce costs and fill vacant space, the Fund has experienced considerable
income pressure on a number of fronts, including:
- Increased rates and utility costs
- Increased finance costs
- The fund has managed to reduce vacancies to 9% (2018: 10,04%), however, this came at a cost including softer rentals to
retain tenants, rent-free periods and tenant installations
The opening of the Fourways Mall super-regional centre is imminent. For the fund, this is the most important milestone
since listing in 2013. The super-regional centre has unsurpassed offerings to the public, including a particular focus on
shoppertainment, and will anchor the fund and the Fourways node into the future. Perhaps even more exciting are the future
opportunities the mall will act as a catalyst for. One has only to look at the growth of the Sandton node where Sandton
City served as a primary catalyst in the node's development to appreciate the extent of the opportunities available to the
fund as market conditions improve. Accelerate is uniquely positioned to take advantage of this.
FINANCIAL POSITION
As at 31 March 2019, Accelerate's investment property portfolio had a value of R12,7 billion (2018: R12,3 billion),
excluding the effects of straight-lining. The increase in the value of the portfolio is mainly due to an increase in the
external valuation of our offshore assets and to a lesser extent the revaluation of local assets.
The fund maintains a diversified funding base being funded 33,2% through the debt capital markets and 66,8% through bank
debt.
Accelerate successfully accessed the debt capital markets in July 2018 through our domestic medium-term note (DMTN)
programme, raising a total of R600 million to refinance R452 million of debt capital markets (DCM) debt as well as
expiring bank debt.
A R1,6 billion swap (6,5% base rate taken out at listing) expired on 31 March 2019. In anticipation of this, management
has for the past few years proactively managed the fund's swap profile. Post the expiry of this large swap, the fund is
82,8% hedged with a weighted average swap expiry profile of 2,5 years (1,9 years at 30 September 2018). The weighted
average debt maturity profile has also improved from 2,1 years (30 September 2018) to 2,5 years with the short-term
portion of long-term debt reducing to R 1,1 billion (2018: R1,4 billion).
The fund continues to monitor interest rates and the swap curve to effectively manage and to ensure swaps are executed at optimal rates when the
opportunity presents itself.
Long-term debt allocation
Debt funding 31 March 2019 % 31 March 2018 %
(Rm) (Rm)
Debt capital markets 1 785 33,2 1 487 28,9
Bank funding 3 590 66,8 3 663 71,1
Total 5 375 100,0 5 150 100,0
Weighted average debt term (years) 2,5 2,1
Short-term portion of debt* 1 111 20,7 1 492 28,9
Debt hedged 82,8 97,4
Weighted average swap term (years) 2,5 2,1
Blended interest rate 8,4 8,4
Interest cover ratio (x) 2,3 2,4
Loan to value** 39,0 40,7
* Post year-end April and June 2019 debt has been refinanced/repaid.
** Takes into account receivables from Fourways developer to be offset at equalisation.
Consolidated Statement of financial position as at 31 March 2019
Note(s) 31 March 2019 31 March 2018
(R'000) (R'000)
ASSETS
Non-current assets 12 205 878 12 533 952
Investment property 12 203 592 12 515 562
Derivatives 1 1 598 17 371
Property, plant and equipment 688 1 019
Current assets 679 224 649 579
Current tax receivable 5 534 5 534
Derivatives - 1 887
Trade and other receivables 1 589 559 565 237
Cash and cash equivalents 1 84 131 76 921
Investment property held for sale 789 707 27 000
Non-current assets held for sale 789 707 27 000
Total assets 13 674 809 13 210 531
EQUITY AND LIABILITIES
Equity 7 965 297 7 861 866
Ordinary share capital 5 115 671 5 103 067
Other reserves 77 887 25 923
Non-controlling interest 19 032 14 519
Retained income 2 752 707 2 718 357
Total equity 7 965 297 7 861 866
Non-current liabilities 4 278 103 3 682 224
Borrowings 1 4 259 323 3 654 607
Derivatives 18 780 27 617
Current liabilities 1 431 409 1 666 441
Trade and other payables 1 297 231 173 526
Derivatives 23 128 385
Borrowings 1 1 111 050 1 492 530
Total equity and liabilities 13 674 809 13 210 531
Consolidated Statement of comprehensive income for the year ended 31 March 2019
Note(s) 31 March 2019 31 March 2018
(R'000) (R'000)
Revenue, excluding straight-line rental revenue adjustment 1 190 524 1 160 620
Straight-line rental revenue adjustment 43 802 45 819
Revenue 1 234 326 1 206 439
Property expenses (374 658) (306 516)
Net property income 859 668 899 923
Operating expenses (46 677) (77 334)
Operating profit 812 991 822 589
Fair value adjustments 5 73 405 542 984
Unrealised (losses)/gains (21 909) 8 612
Expected credit loss provision (7 686) -
Other income 12 933 6 552
Finance income 37 880 37 228
Profit before long-term debt interest and taxation 907 614 1 417 965
Finance costs (341 781) (334 768)
Profit before taxation 565 833 1 083 197
Taxation - 4 549
Profit for the year 565 833 1 087 746
Other comprehensive income that may be reclassified to profit and loss in subsequent periods
Exchange differences on translation of foreign operations 52 031 6 127
Total comprehensive income 617 864 1 093 873
Profit attributable to:
Shareholders of the parent 563 356 1 085 816
Non-controlling interest 2 477 1 930
565 833 1 087 746
Total comprehensive income:
Shareholders of the parent 613 351 1 091 775
Non-controlling interest 4 513 2 098
617 864 1 093 873
EARNINGS PER SHARE
Basic earnings per share (cents) 56,77 110,81
Diluted earnings per share (cents) 55,79 109,13
DISTRIBUTABLE EARNINGS
Profit after taxation attributable to equity holders 563 356 1 085 816
Straight-line rental revenue adjustment (43 802) (45 819)
Fair value adjustments (excluding non-controlling interest) (72 244) (542 316)
Unrealised losses 21 909 28 532
Gains on sale of investment property (6 000)
Amortised lease cost 12 515 7 000
Distributable earnings 475 734 533 213
Consolidated Statement of changes in equity for the year ended 31 March 2019
Other Foreign Share Retained Non- Total
reserves currency capital income controlling equity
(R'000) translation (R'000) (R'000) interest (R'000)
reserve (R'000)
(R'000)
Balance at 1 April 2017 54 383 (1 439) 5 156 011 2 131 616 12 421 7 352 992
Profit for the year - - - 1 085 816 1 930 1 087 746
Other comprehensive income - 5 959 - - 168 6 127
Total comprehensive income - 5 959 - 1 085 816 2 098 1 093 873
Issue of shares - - 2 850 - - 2 850
Repurchase of shares - - (63 150) - - (63 150)
Issue of treasury shares to directors (in terms of the conditional share plan) - - 7 356 - - 7 356
Distribution paid (36 999) - - (499 075) - (536 074)
Conditional share plan reserve 4 019 - - - - 4 019
Total contributions by and distributions to owners of
company recognised directly in equity (32 980) - (52 944) (499 075) (584 999)
Balance at 31 March 2018 21 403 4 520 5 103 067 2 718 357 14 519 7 861 866
IFRS 9 opening balance adjustment - - - (7 082) - (7 082)
21 403 4 520 5 103 067 2 711 275 14 519 7 854 784
Profit for the year - - - 563 356 2 477 565 833
Other comprehensive income - 49 995 - - 2 036 52 031
Total comprehensive income - 49 995 - 563 356 4 513 617 864
Issue of shares (12 604) - 12 604 - - -
Distribution paid - - - (521 924) - (521 924)
Conditional share plan reserve 14 573 - - - - 14 573
Total contributions by and distributions to owners of company recognised directly in equity 1 969 - 12 604 (521 924) - (507 351)
(507 351)
Balance at 31 March 2019 23 372 54 515 5 115 671 2 752 707 19 032 7 965 297
Statement of cash flows for the year ended 31 march 2019
31 March 2019 31 March 2018
(R'000) (R'000)
Cash flows from operating activities
Cash generated from operations 836 836 594 840
Finance income 37 880 37 228
Distribution paid (521 924) (499 075)
Tax received/(paid) - 8 896
Net cash from operating activities 352 792 141 889
Cash flows from investing activities
Purchase of property, plant and equipment (51) (214)
Sale of property, plant and equipment 46 -
Purchase of investment property (380 589) (267 844)
Proceeds from disposal of investment property 230 132 253 337
Net cash from investing activities (150 462) (14 721)
Cash flows from financing activities
Shares repurchased - (63 150)
Long-term borrowings raised 1 785 380 1 332 925
Long-term borrowings repaid (1 643 623) (1 078 910)
Finance cost (341 781) (334 768)
Antecedent distribution - (36 999)
Net cash from financing activities (200 024) (180 902)
Total cash movement for the year 2 306 (53 734)
Cash at the beginning of the year 76 921 133 618
Effect of exchange rate movements on cash balances 4 904 (2 963)
Total cash at end of the year 84 131 76 921
Distribution Analysis
Year ended Year ended
31 March 2019 31 March 2018
(R'000) (R'000)
Distributable earnings 475 734 533 213
Less: Interim distribution from profits (excludes interim distribution from reserves) 254 352 266 037
Final distribution 221 382 267 176
Shares qualifying for distribution
Number of shares at year-end 994 310 123 989 364 344
Less: Bulk ceded shares to Accelerate# (51 070 184) (51 070 184)
Add: Shares repurchased (9 567 404) (9 567 404)
Shares qualifying for distribution 933 672 535 928 726 756
Distribution per share
Final distribution per share (cents) 23,71088 28,76799
Interim distribution per share made (cents) 27,26021 28,77713
Total distribution per share for the year (cents) 50,97109 57,54512
# The cession on these shares relate to bulk in the Fourways area acquired by Accelerate at listing. These shares
will only be eligible for distributions at the earlier of the development of the bulk or December 2021.
Earnings per share
Year ended Year ended
31 March 2019 31 March 2018
(R'000) (R'000)
Basic earnings per share (EPS) amounts are calculated by
dividing profit for the year attributable to ordinary equity
holders of Accelerate by the weighted average number of
ordinary shares outstanding during the year.
Reconciliation of basic/diluted earnings to headline earnings
Profit attributable to shareholders of the parent 563 356 1 085 816
Fair value adjustment (103 811) (589 861)
Capital gains on sale of non-current assets held for sale (10 460) (4 846)
Headline profit attributable to shareholders of the parent 449 085 491 109
Basic earnings per share (cents) 56,77 110,81
Diluted earnings per share (cents) 55,79 109,13
Headline earnings per share (cents) 45,26 49,36
Diluted headline earnings per share (cents) 44,47 50,12
Shares in issue at the end of the year 994 310 123 979 796 940
Weighted average number of shares 992 285 018 979 876 156
Shares subject to the deferred acquisition costs -
Shares subject to the conditional share plan 17 480 830 15 115 467
Weighted average number of deferred shares 17 480 830 15 115 467
Total diluted weighted average number of shares in issue 1 009 765 848 994 991 623
SEGMENTAL ANALYSIS
The individual properties are aggregated into segments with similar economic characteristics such as nature of the
property and the occupier market it serves. Management considers that this is best achieved by aggregating properties into
office, industrial and retail and European retail.
Consequently, the company is considered to have four reportable operating segments, as follows:
- Office segment: acquires, develops leases and sells offices
- Industrial segment: acquires, develops leases and sells warehouses and factories
- Retail segment: acquires, develops leases and sells shopping malls, community centres as well as retail centres
- European single-tenant segment: acquires, develops leases and sells single-tenant space backed by long term leases
Group administrative costs, profit/loss on disposal of investment property, finance revenue, finance costs, income taxes
and segment liabilities are reported on a total basis as it is considered that the segmental split would add no value to
reporting.
There are no sales between segments.
For the year ended 31 March 2018
(R'000) Office Industrial Retail European - Total
single-tenant
Statement of comprehensive income 2018
Revenue, excluding straight-line rental revenue adjustment 317 984 69 841 672 700 100 095 1 160 620
Straight-line rental adjustment 31 095 991 13 733 - 45 819
Property expenses (69 021) (11 803) (190 335) (35 357) (306 516)
Segment operating profit 280 058 59 029 496 098 64 738 899 923
Fair value adjustments on investment property 158 497 (116 567) 529 387 18 544 589 861
Segment profit 438 555 (57 538) 1 025 485 83 282 1 489 784
Other operating expenses (77 334)
Other income 6 552
Fair value loss on financial instruments (46 877)
Unrealised gains 8 612
Finance income 37 228
Long term debt interest (334 768)
Profit before tax 1 083 197
For the year ended 31 March 2019
(R'000) Office Industrial Retail European - Total
single-tenant
Statement of comprehensive income 2019
Revenue, excluding straight-line rental revenue adjustment 297 411 76 660 710 132 106 321 1 190 524
Straight-line rental adjustment 29 867 1 797 12 138 - 43 802
Property expenses (76 377) (17 551) (251 751) (36 665) (382 344)
Segment operating profit 250 901 60 906 470 519 69 656 851 982
Fair value adjustments on investment property (62 172) 47 001 87 893 32 250 104 972
Segment profit 188 729 107 907 558 412 101 906 956 954
Other operating expenses (46 677)
Other income 12 933
Fair value loss on financial instruments (31 567)
Unrealised losses (21 909)
Finance income 37 880
Long-term debt interest (341 781)
Profit before tax 565 833
For the year ended 31 March 2018
(R'000) Office Industrial Retail European - Total
single-tenant
Statement of financial position extracts at 31 March 2018
Assets
Investment property balance 1 April 2017 3 276 550 650 541 6 681 888 1 251 710 11 860 689
Acquisitions 48 000 - - - 48 000
Capitalised costs 12 314 1 775 205 755 219 844
Disposals (81 945) - (194 462) - (276 407)
Investment property held for sale - - 27 000 - 27 000
Straight-line rental revenue adjustment 31 095 991 13 733 - 45 819
Foreign exchange gains/(losses) - - - 27 756 27 756
Fair value adjustments 158 497 (116 567) 529 387 18 544 589 861
Segment assets at 31 March 2018 3 444 511 536 740 7 263 301 1 298 010 12 542 562
Other assets not managed on a segmental basis
Derivative financial instruments 17 371
Equipment 1 019
Current assets 649 579
Total assets 13 210 531
For the year ended 31 March 2019
(R'000) Office Industrial Retail European - Total
single-tenant
Statement of financial position extracts at 31 March 2019
Assets
Investment property balance 1 April 2018 3 444 511 536 740 7 263 301 1 298 010 12 542 562
Acquisitions - - 74 995 - 74 995
Capitalised costs 62 180 727 238 126 4 561 305 594
Disposals/classified as held for sale (701 486) - (331 948) - (1 033 434)
Investment property held for sale 628 307 - 161 400 789 707
Straight-line rental revenue adjustment 29 867 1 797 12 138 - 43 802
Foreign exchange gains/(losses) - - - 165 101 165 101
Fair value adjustments (62 172) 47 001 87 893 32 250 104 972
Segment assets at 31 March 2019 3 401 207 586 265 7 505 905 1 499 922 12 993 299
Other assets not managed on a segmental basis
Derivative financial instruments 1 598
Equipment 688
Current assets 679 224
Total assets 13 674 809
For the year ended 31 March 2018
(R'000) South Africa Austria Slovakia Total
Statement of comprehensive income 2018
Revenue, excluding straight-line rental revenue adjustment 1 060 525 75 071 25 024 1 160 620
Straight-line rental adjustment 45 819 - - 45 819
Property expenses (271 159) (26 517) (8 840) (306 516)
Segment operating profit 835 185 48 554 16 184 899 923
Fair value adjustments on investment property 571 317 13 908 4 636 589 861
Segment profit 1 406 502 62 462 20 820 1 489 784
Other operating expenses (77 334)
Other income 6 552
Fair value loss on financial instruments (46 877)
Unrealised gains 8 612
Finance income 37 228
Long-term debt interest (334 768)
Profit before tax 1 083 197
For the year ended 31 March 2019
(R'000) South Africa Austria Slovakia Total
Statement of comprehensive income 2019
Revenue, excluding straight-line rental revenue adjustment 1 084 203 79 741 26 580 1 190 524
Straight-line rental adjustment 43 802 - - 43 802
Property expenses (345 679) (27 499) (9 166) (382 344)
Segment operating profit 782 326 52 242 17 414 851 982
Fair value adjustments on investment property 72 722 24 188 8 062 104 972
Segment profit 855 048 76 430 25 476 956 954
Other operating expenses (46 677)
Other income 12 933
Fair value loss on financial instruments (31 567)
Unrealised losses (21 909)
Finance income 37 880
Long term debt interest (341 781)
Profit before tax 565 833
For the year ended 31 March 2018
(R'000) South Africa Austria Slovakia Total
Statement of financial position extracts at 31 March 2018
Investment property balance 1 April 2017 10 608 979 938 782 312 928 11 860 689
Acquisitions 48 000 - 48 000
Capitalised costs 219 844 - - 219 844
Disposals/classified as held for sale (276 407) - (209 395)
Investment property held for sale 27 000 - 27 000
Straight-line rental revenue adjustment 45 819 - - 45 819
Foreign exchange gains/(losses) - 20 817 6 939 27 756
Fair value adjustments 571 317 13 908 4 636 522 849
Investment property at 31 March 2018 11 244 552 973 507 324 503 12 542 562
Other assets not managed on a segmental basis
Derivative financial instruments 17 371
Equipment 1 019
Current assets 649 579
Total assets 13 210 531
For the year ended 31 March 2019
(R'000) South Africa Austria Slovakia Total
Statement of financial position extracts at 31 March 2019
Investment property balance 1 April 2018 11 244 552 973 507 324 503 12 542 562
Acquisitions 74 995 - - 74 995
Capitalised costs 305 596 - - 305 594
Disposals/ classified as held for sale (1 033 434) - - (1 033 434)
Investment property held for sale 789 707 - - 789 707
Straight-line rental revenue adjustment 43 802 - - 43 802
Foreign exchange gains/(losses) - 123 826 41 275 165 101
Fair value adjustments 72 722 24 188 8 062 104 972
Investment property at 31 March 2019 11 497 938 1 121 521 373 840 12 993 299
Other assets not managed on a segmental basis
Derivative financial instruments 1 598
Equipment 688
Current assets 679 224
Total assets 13 674 809
NOTES TO THE FINANCIAL STATEMENTS
Corporate Information
The condensed financial statements of Accelerate for the year ended 31 March 2019 were authorised for issue in accordance
with a resolution of the directors passed on 18 June 2019. Accelerate is a public company incorporated and domiciled in
South Africa and its shares are publicly traded on the JSE. The registered office is located at Cedar Square Shopping
Centre, corner Cedar Road and Willow Avenue. The principal activities of Accelerate are acquisition, development
leasing and sales of properties. The functional and presentation currency of Accelerate is South African rand.
All figures are rounded off to R'000 except where otherwise stated.
Basis of preparation
These condensed financial statements for the year ended 31 March 2019 are prepared in accordance with the framework
concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), and
contain the minimum information required by IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as
issued by the Accounting Practices Committee, the Financial Reporting Pronouncements as issued by the Financial Reporting
Standards Council, the requirements of the Companies Act, 71 of 2008, as amended, and the JSE Listings Requirements.
The accounting policies applied in the preparation of these condensed financial statements are in terms of IFRS and are
consistent with those applied in the annual financial statements, including the new and amended IFRS that became effective
during the 31 March 2019 reporting period, none of which had a material impact on Accelerate's financial results, except
for IFRS 9. The adoption of IFRS 9 resulted in an expected credit loss adjustment on the 31 March 2018 provision for
doubtful debts. Under IFRS 9 this provision was increased by R7 082 000.
These condensed financial statements have been prepared under the historical cost convention except for investment
properties which are measured at fair value.
The fair value of investment properties is determined by directors with reference to market-related information, while
other financial liabilities are valued with reference to market-related information and valuations as appropriate. All
investment properties are valued by independent external valuers on a three-year rolling cycle.
These condensed financial statements were prepared under the supervision of Mr Dimitri Kyriakides (CA)SA in his capacity
as chief financial officer.
This abridged report is extracted from audited information, but is not itself audited. The auditors, Ernst & Young Inc.
have issued their unmodified opinion on the audited consolidated financial statements for the year ended 31 March 2019 and
a copy of the audit opinion, together with the underlying audited consolidated financial statements are available for
inspection at the company's registered address.
1. Fair value of financial assets and liabilities
31 March 2019
Carried at Amortised Total
fair value cost# (R'000)
(R'000) (R'000)
Financial assets
Derivatives* 1 598 - 1 598
Trade and other receivables - 564 823 564 823
Cash and cash equivalents - 84 131 84 131
Total financial assets 1 598 648 954 650 552
Financial liabilities
Derivatives* (41 908) - (41 908)
Long-term interest-bearing borrowings - (4 259 323) (4 259 323)
Trade and other payables - (282 768) (282 768)
Current portion of long-term debt - (1 111 050) (1 111 050)
Total financial liabilities (41 908) (5 653 141) (5 695 049)
31 March 2018
Carried at fair Amortised Total
value cost# R'000
R'000 R'000
Financial assets
Trade and other receivables 562 909 562 909
Derivatives* 19 258 - 19 258
Cash and cash equivalents 76 921 76 921
Total financial assets 19 258 639 830 659 088
Financial liabilities
Derivatives* (28 002) (28 002)
Long-term interest-bearing borrowings (3 654 607) (3 654 607)
Trade and other payables (165 401) (165 401)
Current portion of long-term debt (1 492 530) (1 492 530)
Total financial liabilities (28 002) (5 312 538) (5 340 540)
* The values of the derivative financial asset shown at fair value are based on inputs other than quoted prices that are
observable in the market for the assets and liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from
prices) - level 2. The value of the swaps is determined as the discounted value of the future cash flows to be received
from the swap assets. For the valuation, current Jibar was used as an indication of future Jibar.
# The carrying value of financial assets and liabilities carried at amortised cost is considered to approximate the fair
value of those financial assets and liabilities. There have been no significant changes in valuation techniques or
transfers between fair value hierarchy levels.
2. Directors' remuneration
Year ended Year ended
31 March 2019 31 March 2018
(R'000) (R'000)
Total guaranteed package
MN Georgiou Nil Nil
A Costa 4 325 3 993
D Kyriakides 3 150 2 815
JRJ Paterson 3 387 3 064
Short-term incentive payment
MN Georgiou Nil Nil
A Costa 1 850 Nil
D Kyriakides 1 050 Nil
JRJ Paterson 1 350 Nil
Non-executive directors' fees
TT Mboweni 634 975
GC Cruywagen 414 412
TJ Fearnhead 430 424
JRP Doidge 400 388
K Madikizela 360 358
Ass. Prof FM Viruly 360 358
Share options exercised (number of shares)
Year ended Year ended
31 March 2019 31 March 2018
(number of shares) (number of shares)
MN Georgiou 1 012 514 -
A Costa 2 068 158 2 122 826
D Kyriakides 440 084 719 283
JRJ Paterson 1 313 453 1 410 928
3. Related party transaction
Relationships
MN Georgiou and A Costa are directors of both Accelerate Property Fund Ltd and Accelerate Property Management Company
(Pty) Ltd. Both directors' total remuneration is paid by Accelerate Property Fund. MN Georgiou own 100% of Fourways
Precinct (Pty) Ltd through The Michael Family Trust and also owns 100% of Accelerate Property Management Company.
Year ended Year ended
31 March 2019 31 March 2018
(R'000) (R'000)
Related party transactions and balances
Related party balances
Loan accounts
Fourways Precinct (Pty) Ltd - 39 646
The Michael Family Trust 68 180 62 142
Vacancy guarantee
Fourways Precinct (Pty) Ltd 9 339 17 038
Development guarantee
Fourways Precinct (Pty) Ltd 248 364 105 629
Related party transactions
Vacancy guarantee
Fourways Precinct (Pty) Ltd - -
Development guarantee
Fourways Precinct (Pty) Ltd 113 163 58 972
Interest charged
Interest charged on outstanding amounts:
Fourways Precinct (Pty) Ltd 17 544 7 803
The Michael Family trust 5 172 4 073
Accelerate Property Management costs
Fourways Precinct (Pty) Ltd (2 121) (3 745)
Accelerate Property Management Company (Pty) Ltd (7 912) (6 156)
Letting commission paid
Fourways Precinct (Pty) Ltd (21 020) (6 604)
Financial guarantees (52 911) (37 144)
4. Fair value adjustments
Fair value adjustments Year ended Year ended
31 March 2019 31 March 2018
(R'000) (R'000)
Investment property (Fair value model) 104 972 589 861
Mark to market movement on swaps (31 567) (46 877)
73 405 542 984
5. Capital commitments
In terms of Accelerate's budgeting process, R140 million (2018: R79.4 million) was allocated to Accelerate's planned
capital expenditure. As such, Accelerate views this amount as authorised and not contracted.
6. Financial guarantee
During December 2016 an executive buy-in structure was initiated in order to ensure that the executive directors of
Accelerate are adequately incentivised and aligned with the interests of the company and its shareholders in the long
term. Special purpose vehicles (SPVs) funded through bank debt from RMB can acquire shares up to a maximum of R205 million
in Accelerate at market-related share prices. The interest on bank debt in the SPVs will be serviced by the distributions
received from APF. RMB has cession over these shares and the directors will only have an unconditional right to the
shares in the SPVs once the bank debt has been settled. Accelerate guarantees to RMB the performance of each SPV of its
obligation. Accelerates liability under the guarantee is 63,3% of the drawn commitment to the extent that losses incurred
by RMB are not settled by the sale of the shares RMB has cession over. At 31 March 2019 a liability of
R98 million was recognised for this guarantee provided.
7. Subsequent events
The following buildings held for sale at 31 March 2019 have been sold post year-end at fair value:
- Mr Price on 7 May 2019
- The Pines on 7 May 2019
- Glen Gables on 13 May 2019
- Eastlynne on 17 May 2019
- Wanooka Place on 30 May 2019
Accelerate has agreed to accept the proposed 40,9% rental assistance to Edcon in the form of Edcon shares to be issued to Accelerate
DIRECTORS' RESPONSIBILITY STATEMENT
The directors of Accelerate assume full responsibility for the preparation of the condensed consolidated financial
statements and has been correctly extracted from the underlying annual financial statements.
FINAL DISTRIBUTION
The board of Accelerate has declared a final cash distribution (number 11) (Cash Distribution) of 23,71088 cents per
ordinary share for the year ended 31 March 2019 (2018: 28,76799).
Shareholders who have dematerialised their shares are required to notify their duly appointed Central Securities
Depository Participant (CSDP) or broker of their election in the manner and time stipulated in the custody agreement
governing the relationship between the shareholder and their CSDP or broker.
The source of the distribution comprises mainly net income from property rentals earned from the company's property
investments as well as interest earned on excess cash on deposit. Please refer to the condensed statement of comprehensive
income for further details.
A dividend withholding tax of 20% will be applicable on the dividend portion to all shareholders who are not exempt.
The issued share capital at the declaration date is 994 310 123 (2018: 989 364 344) ordinary shares. The company's income
tax reference number is: 9868626145
Tax implications for South African resident shareholders
Accelerate was granted REIT status by the JSE with effect from 12 December 2013 in line with the REIT structure as
provided for in the Income Tax Act, No. 58 of 1962, as amended (the Income Tax Act) and section 13 of the JSE Listings
Requirements.
The REIT structure is a tax regime that allows a REIT to deduct qualifying distributions paid to investors in determining
its taxable income.
The Cash Distribution of 23,71088 (2018: 28,76799) cents per ordinary share meets the requirements of a "qualifying
distribution" for the purposes of section 25BB of the Income Tax Act (a qualifying distribution). Accordingly, qualifying
distributions received by local tax resident shareholders must be included in the gross income of such shareholders (as a
non-exempt dividend in terms of section 10(1)(k)(aa) of the Income Tax Act), with the effect that the qualifying
distribution is taxable as income in the hands of the Accelerate shareholder. These qualifying distributions are, however,
exempt from dividend withholding tax in the hands of South African tax resident shareholders, provided that the South
African resident shareholders have provided the following forms to their CSDP or broker, as the case may be, in respect of
uncertificated ordinary shares, or the transfer secretaries, in respect of certificated ordinary shares:
- A declaration that the distribution is exempt from dividends tax
- A written undertaking to inform the CSDP, broker or transfer secretaries, as the case may be, should the circumstances
affecting the exemption change or the beneficial owner ceases to be the beneficial owner, both in the form prescribed by
the Commissioner for the South African Revenue Service. Shareholders are advised to contact their CSDP, broker or the
transfer secretaries, as the case may be, to arrange for the above mentioned documents to be submitted prior to payment of
the distribution, if such documents have not already been submitted
Tax implications for non-resident shareholders
Qualifying distributions received by non-resident shareholders will not be taxable as income and instead will be treated
as ordinary dividends, but which are exempt in terms of the usual dividend exemptions per section 10(1)(k) of the Income
Tax Act. It should be noted that until 31 December 2013, qualifying distributions received by non-residents were not
subject to dividend withholding tax. From 1 January 2014, any qualifying distribution received by a non-resident from a
REIT will be subject to dividend withholding tax at 20%, unless the rate is reduced in terms of any applicable agreement
for the avoidance of double taxation (DTA) between South Africa and the country of residence of the shareholder.
Assuming dividend withholding tax will be withheld at a rate of 20%, the net amount due to non-resident shareholders
will be 18,96870 (2018: 23,01439) cents per ordinary share. A reduced dividend withholding tax rate in terms of the
applicable DTA, may only be relied on if the non-resident shareholders have provided the following forms to their CSDP
or broker, as the case may be, in respect of the uncertificated ordinary shares, or the transfer secretaries, in respect
of certificated ordinary shares:
- A declaration that the dividend is subject to a reduced rate as a result of the application of a DTA
- A written undertaking to inform their CSDP, broker or the transfer secretaries, as the case may be, should the
circumstances affecting the reduced rate change or the beneficial owner ceases to be the beneficial owner, both in the
form prescribed by the Commissioner for the South African Revenue Service. Non-resident shareholders are advised to
contact their CSDP, broker or the transfer secretaries, as the case may be, to arrange for the above mentioned documents
to be submitted prior to payment of the distribution if such documents have not already been submitted, if applicable
Summary of the salient dates relating to the Cash Distribution are as follows:
2019
Declaration date Thursday, 20 June
Last day to trade (LDT) cum dividend Tuesday, 23 July
Shares to trade ex-dividend Wednesday, 24 July
Record date Friday, 26 July
Payment date Monday, 29 July
Notes:
1. Share certificates may not be dematerialised or rematerialised between Wednesday, 24 July 2019 and Friday, 26 July
2019, both days inclusive.
2. The above dates and times are subject to change. Any changes will be released on SENS and published in the
press.
The Cash Dividend may have tax implications for resident and non-resident shareholders. Shareholders are therefore
encouraged to consult their professional advisors should they be in any doubt as to the appropriate action to take.
ANNUAL GENERAL MEETING
The company's annual general meeting (AGM) will be held at Accelerate's registered office, in the main boardroom, Cedar
Square Shopping Centre, Management Office, 1st Floor, Cnr Willow Avenue and Cedar Road, Fourways, Johannesburg on
Wednesday, 24 July 2019 at 10h00 . Further details on the company's AGM will be included in Accelerate's integrated annual
report to be posted to shareholders on or before 26 June 2019. A PDF of the integrated annual report and notice of AGM
will be available to download at www.acceleratepf.co.za on the same day of distribution.
On behalf of the board
Mr T Fearnhead Mr MN Georgiou Mr D Kyriakides
Non-executive chairman Chief executive officer Chief financial officer
20 June 2019
Corporate information
Directors
Mr TJ Fearnhead (independent non-executive chairman)
Mr TT Mboweni (former chairman - resigned 11 October 2018 due to appointment as minister of finance)
Mr A Costa (chief operating officer)
Dr GC Cruywagen (lead independent, non-executive director)
Mr MN Georgiou (chief executive officer)
Mr D Kyriakides (chief financial officer)
Ms K Madikizela (independent non-executive director)
Mr JRJ Paterson (executive director)
Ass. Prof FM Viruly (independent non-executive director)
Mr JRP Doidge (independent non-executive director - retired 31 March 2019)
Mr G Cavaleros (independent non-executive director - appointed 1 May 2019)
Mr AM Mawela (independent non-executive director - appointed 1 May 2019)
Mr DJ Wandrag (independent non-executive director - appointed 1 May 2019)
Registered office and business address
Cedar Square Shopping Centre, Management Office, 1st Floor, Cnr Willow Ave and Cedar Rd,
Fourways, Johannesburg, 2055
Tel: 010 001 0790
Web: www.acceleratepf.co.za
Investor relations
Articulate Capital Partners: Morne Reinders
Tel: 082 480 4541
Email: morne@articulatepartners.com
Company secretary
Ms Joanne Matisonn
Cedar Square Shopping Centre, Management Office, 1st Floor, Cnr Willow Ave and Cedar Rd,
Fourways, Johannesburg, 2055
Transfer secretaries
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 PO Box 61051, Marshalltown, 2107, South Africa
Tel: 011 370 5000
Email: proxy@computershare.co.za
Fax: 011 688 2238
Sponsor
The Standard Bank of South Africa Limited
(Registration number 1962/000738/06)
Baker Street, Rosebank, 2196
PO Box, 61344, Marshalltown, 2107
Auditors
Ernst & Young Inc.
102 Rivonia Road, Sandton, Johannesburg, 2149
Tel: 011 772 3000
Internal auditors
LateganMashego Auditors (Pty)Ltd
Registration number 2001/107847/07
Registered address: 11 Boca Walk, Highveld, Centurion, 0157
Email: lindie@lateganmashego.co.za
Tel: 082 898 7644/083 609 1159
Attorneys
Glyn Marais Inc.
(Registration number 1990/000849/21)
2nd Floor, The Place, 1 Sandton Drive
Sandton, 2196
PO Box 652361, Benmore, 2010
Date: 20/06/2019 08:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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