Hyprop's sectorial split will reflect an increased bias to the retail sector following the conclusion this week of a R320m deal to acquire The Mall of Rosebank and JHI House.

A regional shopping centre in the north of Johannesburg, The Mall adds to the list of Hyprop's Johannesburg premier shopping centre's, Hyde Park Corner and The Glen.

It is Hyprop's intention to maintain a greater exposure to the retail sector, according to Hyprop director Wolf Cesman.

The group's total portfolio reflected a 58% exposure to the retail industry and 42% to the commercial sector in December last year.

Inclusion of The Mall and JHI House would increase the retail exposure to about 69%.

Cesman said the group was evaluating its commercial exposure, and properties that did not fit the portfolio would be disposed of.

"We are comfortable to maintain a portion of good-quality commercial properties," said Cesman.

The group scooped JHI House and The Mall, beating contenders Acucap, the property loan stock company, and the insurance group Momentum. Hyprop's R320m bid offered a choice to Cenprop unit holders to take Hyprop units, cash or a mix of the two.

If Cenprop unit holders opted for 100% cash, Hyprop would have to borrow to settle the transaction, which would raise its gearing from the current 19% to about 40%.

However, if Cenprop unit holders took 100% units, Hyprop's gearing would decline. "Logic dictates that the Cenprop unit holders opt for Hyprop units," says Cesman.

Hyprop units trade at a premium to the level at which they were issued for the transaction, and they also provide the benefit of a built-in dividend. Hyprop's units were issued at R10 a unit for this transaction. Hyprop's unit price closed at R11,70 on the JSE Securities Exchange SA yesterday.