Picture: THINKSTOCK
- Picture: THINKSTOCK

Development company Acsion is on track to build its two largest assets to date, an upper market residential offering in Sandton and a shopping centre in Cyprus.

The group said these two assets would be worth nearly R5bn together and should come on line in early 2019. They would provide a significant boost to the development company, which owns about R5.1bn in assets already.

Acsion reported in its financial statements on Monday that it had managed to grow its net asset value 19% in the year to February.

During the reporting period, Acsion began construction on Acsiopolis, its flagship 20-storey mixed-use development in Benmore, Sandton.

The development, set to be worth about R2.3bn when completed in early 2019, is being designed to appeal to people who work in and are looking to live in Sandton. At the end of February, five parking levels had been completed at Acsiopolis.

The group also announced it would build a 40,000m² SquaredMall@Lanarka shopping centre in Lanarka, Cyprus, its first European development. This would be the largest mall in Lanarka, said CEO Kiriakos Anastasiadis.

"The mall, worth about €120m, will be located in the attractive port city of Lanarka. The city is benefiting from tourism. Cyprus overall is growing at about 3% a year," he said.

Mall@Larnaka is Acsion’s first international retail development. Acsion has a 33-year lease for the mall, with two options to renew of 33 years each.

A number of approvals are required before construction can commence. Acsion said that all approvals should have been obtained by the end of 2017.

"We are excited about this development, which promises to yield returns that at the very least meet our investment criteria," said Anastasiadis.

"We are pleased to have delivered such an excellent set of results. Rental escalations, new leases concluded, focused cost control and the addition of two new developments to our developed investment portfolio bolstered our performance," said Acsion’s chief financial officer, Pieter Scholtz.

Acsion owns eight predominantly retail income paying properties that were developed in-house. These assets were valued at R5.1bn at the end of the reporting period.

The portfolio’s weighted average lease expiry by gross lettable area was 3.58 years and vacancies, including some strategic vacancies, totalled 5.43% for the period.

"Acsion's value engineering approach is paying off despite a difficult economic climate," said Chris Segar of Ivy Asset Management.

 "Positive metrics that stand out are the significant NAV accretion, a lower cost to income ratio due to solar energy efficiencies and tight management cost control. On the flip side vacancies rose slightly and HEPS grew only marginally," said Segar.

 "Some of the new developments such as Mfula in Piet Retief have reached completion and the iconic Acsiopolis is progressing well and will surely alter the Sandton skyline," Acsion said.

Acsion's pipeline in SA and Europe, some €60m in Europe,  means that they will dent some of their debt headroom and they now have access to a new R1bn debt facility.  

Finally, although Acsion is a focused NAV play, management have proposed a maiden dividend that will reward their patient minority shareholders.

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