Accelerate Property Fund has become the latest South African investor to arrive on European shores with the launch of a platform in Central and Eastern Europe and the acquisition of a retail portfolio in Austria and Slovakia.
The company, a listed property fund based in Johannesburg, has agreed to buy an initial portfolio of big box retail properties in Austria (卤80%) and Slovakia (卤20%) in an off-market deal valued at 鈧�140 mln. The deal, which is expected to close in July/August 2016, reflects a yield of 7.11%.
The portfolio is let on a long-term basis to a major blue chip multinational retailer operating across Europe. It offers around 104,000 m2 of gross lettable area.
Accelerate said it is planning further acquisitions for the CEE investment platform with a focus on single-tenanted, long-leased properties in the retail, industrial or office sectors. The platform will be wholly owned by Accelerate with the possibility to introduce co-investors at a later stage.
The company plans to fund up to 50% of the investment through euro-denominated debt from domestic European, fixed on a long-term basis (five to 10 years).
Accelerate joins a string of South African investors which have recently entered Europe as part of a strategy to take advantage of record low interest rates in Europe. Earlier this year, South African REIT Redefine Properties acquired a 75% stake in Echo's 鈧�1.2 bn high-yielding commercial platform in Poland. Redefine is forking out 鈧�362 mln for the stake, net of debt, valuing the portfolio at 鈧�1.188 bn, or a yield of just under 6%.
That deal - the single largest offshore property transaction by a South African property company - will be financed via debt and equity at a proposed 60% gearing at the property level. Accelerate is headed by real estate entrepreneur Michael Georgiou.
Similarly, South African firms Hyprop, and Atterbury Group and Attacq recently carried out shopping mall deals in Serbia and Montenegro in a share deal valued at just under 鈧�203 mln.
Another major fund that has been trying to gain exposure to Europe is Growthpoint Properties, the biggest South African-based REIT. According to South African press reports, the company is rumoured to be preparing a takeover move for Stenprop, which owns a total of 鈧�700 mln of office, retail, logistics, and healthcare assets in Germany, the UK and Switzerland.
