Hyprop and Redefine said yesterday they would jointly develop Shelley Junction shopping centre near Shelley Beach at a cost of about R190m over the next year. The venture is aimed at entrenching Hyprop's position as one of the leading listed retail property funds on the JSE Securities Exchange SA.

The retail property jewels in Hyprop's crown include Canal Walk in Cape Town, and Rosebank Mall, The Glen shopping centre and Hyde Park in Johannesburg.

Redefine owns an 11% interest in Hyprop and its asset management company is a wholly owned subsidiary of Madison Property Fund Managers, which also has a 30% interest in Hyprop's asset management company.

Hyprop recently bought a 50% interest in the development from Standard Bank Properties and Bentel Property Consultants.

Hyprop MD Pieter Prinsloo said Redefine initially had a consortium with Standard Bank and Bentel.

Standard Bank and Bentel decided that they would rather sell their interest and Redefine then approached Hyprop , said Prinsloo.

"The attraction for us is we get a better return on new developments, because buying existing shopping centres is too expensive at the moment," he said.

Hyprop and Redefine said the 27000m² first phase of Shelley Junction' was already 90% let, with strong tenant demand guaranteed to ensure full occupancy by the scheduled completion in October next year.

Angelique de Rauville, MD of listed property portfolio management company Provest, said the venture was good for Hyprop because it was diversifying geographically out of Gauteng and Cape Town, where it had been exclusively focused. It had been acquired at an attractive yield as retail properties were hard to come by and sought after.