Hyprop: Rosebank Mall and Africa focus

Posted On Thursday, 23 August 2012 16:10 Published by Commercial Property News
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In a busy period Hyprop advanced its strategy of growing its asset base with the approval of the Rosebank Mall redevelopment and by expansion into Africa through an investment in Atterbury Africa

Benefiting from positive trading conditions, premier listed shopping centre fund Hyprop posted distributions for the six months to June 2012 of 198 cents per unit, up 9,4% from the same period in 2011. 

CEO Pieter Prinsloo says: “Hyprop’s solid performance was motivated by a number of macro-economic positives and operational successes - trading conditions were stronger, particularly at our larger malls and we achieved savings on interest costs and a healthier performance from the Southern Sun Hotel. In addition we derived greater benefit from our investment in Sycom on the back of its improved performance.”

Vacancy levels were lower at 3,8% (December 2011: 4,1%). “Demand for shops remains healthy in the super regional and large regional malls, with virtually no vacancies,” says Prinsloo.

In line with Hyprop’s stated strategy to sell off non-core assets, its 50% undivided share in Southcoast Mall was sold to Redefine Properties for R110,5 million in the period. Hyprop also disposed of its investment in Vunani Property Investment Fund (which previously listed on the JSE) for R101 million, and agreement was reached in June 2012 for the sale of the Trade Centre property in the CapeGate precinct for R70 million. Subsequent to the period end, Hyprop sold its investment in Acucap for R108 million.

Net borrowings at year-end totalled R5 billion, equating to a gearing ratio of 24,7% which was notably down from 26,2% at December 2011. The lower gearing is a result of an increase in property valuations and the application of proceeds on disposals.

Hyprop’s development focus for the year ahead remains the Rosebank Mall refurbishment and extension. “Construction on the Gardens site has started and the project is expected to take 24 months to complete,” confirms Prinsloo. This will almost double the Mall’s retail space from36 000m² to 62 000m², substantially growing its national tenant base. “The board has approved the redevelopment project at a cost of approximately R920 million, with an expected yield in the region of 7%,” he adds.

Further development projects include planning for extensions to Canal Walk to meet rising tenant demand, and the upgrade of Willowbridge South. The Clearwater Mall extensions, specifically to the Edgars and Jet stores, were completed by the end of the period at a cost to Hyprop of R12,9 million and an incremental yield of 13,1%.

Regarding Atterbury Africa, in which Hyprop has co-invested together with the Atterbury Group, Prinsloo says: “Our main joint focus is to primarily develop and own quality shopping centres in Africa, which as a growing emerging economy offers substantial opportunities.” Hyprop has an initial shareholding of 37,5%and has committed to invest R750 million over the next five years. Atterbury Africa recently purchased a 42,5% interest in the successful Accra Mall. “We intend developing further shopping centres in Ghana and other countries on the continent,” Prinsloo says.

He concludes that Hyprop will continue its strategy of expanding and enhancing existing shopping centres while disposing of further non-core assets. On the back of improved distribution growth for the first six months, Hyprop has increased its distribution growth forecast to between 5% and 7% for the full year ending December 2012.

Last modified on Wednesday, 29 May 2013 13:31

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