Hyprop shines again with 82% growth

Posted On Thursday, 19 August 2004 02:00 Published by eProp Commercial Property News
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Property loan stock Hyprop Investments today released results for the six months to June 2004 showing 82% growth in operating income.

Property-Housing-ResidentialThe interim period saw another stellar performance from the fund’s retail portfolio which contributed strongly to Hyprop’s continued growth. 

Turnover increased by 86% to R252,6 million with reported operating income of R152,7 million.  Headline earnings of 78,6 cents per combined unit rose 18% over the comparative period.  At June the company’s borrowings amounted to R1 billion, equating to 45% of the value of the fund’s portfolio on the open market.

Hyprop MD Pieter Prinsloo attributes the results primarily to “the retail portfolio’s strong performance on the back of lower interest rates and upbeat consumer confidence.”  Hyprop continued to slash vacancy levels in the retail portfolio by 29% from year-end, with vacant space at June 2004 comprising only 5,2% of the portfolio’s total square meterage.  “The combination of proactive tenant management and the centres’ prime locations enabled us to cut vacancies by letting more than 4 500m2 to new tenants.”

Prinsloo says that increasing visitor footfall and the ongoing flood of new tenant requests prompted Hyprop to extend two of its A-Grade centres.  The R30 million extension to Hyde Park was completed during the period, introducing a new-look Woolworths, more tenants and additional parking facilities.  The Glen’s extensions valued at R86 million (of which Hyprop is responsible for R64,6 million) are currently under construction.  As a result of the fully-occupied tenancy of the 6000 m2 of new retail space, Hyprop has already begun to plan a second phase of extensions.  The fund increased its stake in The Glen during the period to 75,15%.  The purchase of the additional 25% interest for R112,8 million was approved by unitholders.  “Taking the lion’s share in The Glen will facilitate Hyprop’s increased participation in the centre’s ongoing growth, further strengthening our retail portfolio,” says Prinsloo. 

Hyprop’s commercial portfolio fared satisfactorily despite slow demand for office space.  Vacancies were reduced by 6% with a fair amount of lettings to new tenants.  “The lack of demand in the commercial market is inhibiting any significant growth in rentals, so our focus will remain on tenant retention and reducing vacancies going forward,” says Prinsloo.

Looking ahead he says that Hyprop will continue to consider acquisitions that fit with its growth strategy to enhance the portfolio’s value.  As recently announced Hyprop completed a rights offer that raised R250 million.  This brought to a close the R376 million capital raising exercise begun earlier this year with an issue of shares for cash.  “The funds will be used towards future acquisitions or investments as well as reducing borrowings,” says Prinsloo.

He is confident of Hyprop’s prospects for the six months ahead to year-end.  “The fund is on track to meet its headline earnings forecast of 150,5 cents per unit for the year.”

Hyprop’s interim distribution to June of 77 cents was up 18% over the same period last year.  The company added 12 cents to that for the month of July, paying the whole 7 month distribution of 89 cents in one to ensure that the new units issued in August in terms of the right offer would rank on the same footing as those already in issue at that time.

Issued by: Envisage Communications
Nicole Sacks
  (011) 325 5944/083 287 2771  

On behalf of: Hyprop Investments Limited
  Pieter Prinsloo, MD
  (011) 325 4340/082 451 3103

Last modified on Tuesday, 13 May 2014 12:51

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