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Hyprop investment reaps rich rewards

Posted On Thursday, 24 March 2016 13:20 Published by
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Consumer spending may well be in the doldrums, but punters who invested in blue-chip mall owner Hyprop Investments, when the share price was about R89, are in the pound seats.

 Pieter Prinsloo

Consumer spending may well be in the doldrums, but punters who invested in blue-chip mall owner Hyprop Investments in January, when the share price slumped to levels of about R89, are in the pound seats.

The stock has rebounded nearly 37% in the past two months, touching levels of R121.70 yesterday.

That is not too far off the R130 all-time high reached at the end of October. Hyprop’s share price recovery is no doubt partly due to a better-than-expected set of interim results and management’s new offshore expansion strategy.

Hyprop delivered a healthy 13.4% rise in dividend payouts for the six months to December, ahead of the market forecast of 10%. Earnings were boosted by the stellar performance of Rosebank Mall in Johannesburg, following a major facelift and extension.

The company’s Western Cape properties including Canal Walk and Somerset Mall, achieved double-digit growth in trading densities. That again underscores the notion that shopping centres that cater to higher-end consumers and dominate their catchment areas tend to be more resilient in a downturn than their mid to lower-income counterparts. Management has also impressed with its ability to secure global tenants, with Starbucks set to open its first South African outlet at Rosebank Mall next month and H&M opening a store at Clearwater Mall on the West Rand.

Investors are also supportive of Hyprop’s recent acquisition of a 60% stake in two Eastern European shopping centres, one in Serbia and the other in Montenegro.

Trade union Solidarity says Sasfin Bank must pay back the “blood money” it elicited for Highveld Steel and Vanadium when the steel producer went into business rescue nearly a year ago.

The bank extracted a R35m penalty on top of an early and immediate repayment of a R100m loan by the steel producer, by refusing to cede control of a debtors’ book needed to release funding from the state-mandated Industrial Development Corporation. Since then, about 2,300 workers have lost their jobs at the factory situated near Emalahleni in Mpumalanga.

Solidarity says Sasfin has been “boasting in the media” that its interim revenue for the period to December grew 19% to R568m. The union says prospects for Highveld’s workers are grim, as the firm does not even have the funds to pay their severance packages.

The union is delivering food parcels to families of retrenched workers. It says the way in which Sasfin treated Highveld and its employees does not synch with claims on Sasfin’s website that it values the upliftment of communities. One hopes the R35m penalty charged by Sasfin did not go on staff bonuses in December.

source" Business Day

Last modified on Thursday, 24 March 2016 13:54
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