A redeveloped Leaping Frog shows the vast underlying potential of these faded assets…
Accelerate Property Fund’s fantastical Fourways super-node dream – at one point it shared a render of skyscrapers mushrooming around the mall – is in ruins. As the turnaround of Fourways Mall, of which it owns 50%, labours on, the JSE-listed fund is being forced to continuously sell down its other assets to pay down a mountain of debt.
Following the disposal of The Buzz shopping centre and the adjacent Waterford centre, it will be left with just three properties in the node: Fourways Mall, Cedar Square and BMW Fourways.
In the not-too-distant future, that number may decline to just a single one.
The dramatic redevelopment of Leaping Frog shopping centre in Fourways following its sale by Accelerate in April 2022 shows just how poorly Accelerate has managed most of its assets over time.
These neighbourhood convenience centres have seen chronic underinvestment and the lack of a coherent letting strategy since the fund listed over a decade ago.
By luck or design (likely the former), it actually listed on the JSE with, and then acquired, some pretty good assets. Extremely limited capital expenditure has seen many of its retail assets fade and become increasingly irrelevant in the markets they serve.
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In June 2021, a fire in the storeroom of the Checkers at Leaping Frog saw the store evacuated and shut. It never reopened. By the time the centre was sold nine months later, it retained a single national tenant, Nando’s. The rest were a mix of largely second-tier franchises and independent businesses. Parking at the centre had been chaotic for years, since the Nando’s was plonked in the middle of the parking lot over a decade ago (it later moved to its current location).
Stellenbosch-based Dorpstraat, the new owners of Leaping Frog, have redeveloped it into a world-class centre, with nine national tenants (including Checkers, LiquorShop, Petshop Science, Clicks, Dis-Chem and The Crazy Store), a reimagined dining offering (Hudsons, On The Bone Steakhouse, Piza e Vino, Beira Alta and more), while growing its assortment of independents.
Parking flow has been improved, as has the branding and marketing of the centre (previously, it didn’t even have a website). The mall is incomparable to the struggling mess with noticeable vacancies that Dorpstraat acquired. Sure, the redevelopment required sizeable investment, but the new owner understood the potential of the asset.
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The same Dorpstraat will acquire two other centres from Accelerate, The Buzz and Waterford, which are adjacent to each other along Witkoppen Road towards Douglasdale. Both are in a similar situation to what Leaping Frog was in. A “minor revamp” post Covid-19 helped reduce vacancies, but The Buzz currently has no anchor tenant following the closure of Pick n Pay in the last 12 months.
Planet Fitness remains open, but there should surely be a question mark about whether it will continue trading in the medium-term, following the group’s opening of a new gym at Fourways Mall less than 2km away.
At Waterford, a McDonald’s Drive-Thru (again plonked in the parking lot) is the only national/tier one tenant, with Econofoods, Best Before and a Liquor City being the other sizeable ones. The remaining stores at both are a mix of independent restaurants (save for Hooters at The Buzz) and retailers, beauty salons, barber shops, vape stores, cellphone repair outlets and vehicle service centres. Neither centre has a website.
Clearly, Dorpstraat has a plan for The Buzz and Waterford, and it will surely manage to improve the tenant mix substantially following an all but likely redevelopment.
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Dorpstraat acquired and redeveloped Douglasdale Village, 2km south of The Buzz, about a decade ago, significantly increasing the size of the Woolworths Foods at the centre, while adding Clicks, Continental Linen, The Crazy Store, Vida e Caffè, and a number of other smaller or independent retailers (while retaining other core tenants such as the restaurant Throbbing Strawberry and pub Hogshead).
It acquired The Buzz for R150 million and Waterford for R65 million, which are their current fair values according to Accelerate (excluding the bulk land behind the former). But, in 2019, it valued these at R277 million and R76 million respectively, and The Buzz was valued at R271 million as recently as 2024 (R211 million, excluding the bulk).
Dorpstraat paid R130 million for Leaping Frog (R10 million less than its valuation at the time), and significantly below the R161 million Accelerate valued it at in 2019. At the time of listing, Accelerate acquired The Buzz for R241 million, Leaping Frog for R147 million, and Waterford for R39 million.
This article was republished from Moneyweb. Read the original here.
