Pretoria - Hyprop Investments, the listed property loan stock company that last year acquired Canal Walk shopping centre in Cape Town for R1.16 billion with Ellerine Bros, is planning a rights offer of about R300 million.

Managing director Pieter Prinsloo said yesterday the intention of the rights offer was to reduce Hyprop's debt to open market ratio from 51 percent to less than 45 percent, which was in line with the industry norm.

Prinsloo said a specific amount had not been decided on but it would be at least 25 percent of the current units in issue, "so it could be around R300 million

"We'll start investigating it now and hopefully have a decision by the middle of this year," he said.

Plans for the rights offer emerged when Hyprop yesterday reported a 7.7 percent increase in annual distribution to R1.40 a combined unit for the year to December.

Headline earnings a combined unit improved by 9.7 percent to R1.424.

Turnover increased 97 percent to R316.7 million, while operating income rose 85 percent to R195.3 million.

Prinsloo said these steep increases were largely because of acquisitions that were made during the year. 

During the reporting period Hyprop added to its premium portfolio the Canal Walk shopping centre in the Western Cape and Rosebank Mall, JHI House and The Grace hotel and offices in Johannesburg.

Combined unit holders' funds increased by 43 percent to R1 billion and the net asset value per combined unit improved 4.4 percent to R11.69.

"Reduced interest rates, the rand's relative strength and the drop in import costs all boosted consumer spend during the year, making for a bumper festive season that directly benefited Hyprop's retail portfolio," Prinsloo said.

Prinsloo said 80 percent of Hyprop's assets comprised prime shopping centres and the balance was commercial offices but, as more investment opportunities arose, the fund would like to focus more on the retail sector.

Prinsloo expressed optimism for the year ahead and was confident Hyprop would continue to deliver further growth in distributions to unit holders.

He said Hyprop would pursue much the same strategy as it had been doing in the year ahead.

This involved continuing to explore strategic acquisitions to enhance the portfolio's quality and diversification, while disposing of select commercial properties.

Hyprop was untraded at R13.65 yesterday.