Canal Walk puts spring in Hyprop's distribution

Posted On Friday, 25 February 2005 02:00 Published by eProp Commercial Property News
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MD gives retail portfolio the credit.

Property-Housing-ResidentialListed property loan stock company Hyprop Investments beat market forecasts yesterday when it posted announced a 16,4% surge in its total distributions for the year ended December.

Hyprop's distribution of 163c a unit beat its forecast of 150,5c by 8%, with MD Pieter Prinsloo attributing the positive results to the performance of the firm's retail portfolio.

Among the company's retail assets is its flagship property are Canal Walk shopping centre in Cape Town and Johannesburg's the Rosebank Mall, The Glen and the Hyde Park shopping centres. The company has also bought a 50% stake interest in KwaZulu-Natal's Southcoast Mall. The mall is under construction and due to open in November.

The company said an "outstanding performance" from its retail portfolio also helped to increase the total portfolio value to almost R4bn, an increase of R924m over the past year.

The firm's net asset value also jumped 53,2% to R17,91 a unit.

This reduced the gap to about 11% on Hyprop's trading price on the local bourse JSE Securities Exchange SA of R20 a unit.

Canal Walk, included for the full year for the first time since it was bought by Hyprop in October 2003, yielded a 12,4% return on cost. Prinsloo said Hyprop was looking to continue growing the property portfolio.

"We are looking at a few opportunities but we haven't committed ourselves to any developments or acquisitions," he said.

In terms of value, retail properties make up 89% of Hyprop's property portfolio, while offices account for 11%.

Hyprop has also managed to slash office vacancies 35% to 2,2% of its the portfolio.

Prinsloo said this was due to the firm being able to let space, as well as the disposal of various properties which had with vacancies.

Mariette Warner, fund manager of the Stanlib Property Income Fund, said Hyprop's "exceptional growth" was due to a "much better than expected" performance from Canal Walk.

Warner said the 53% increase in net asset value was "largely fuelled" by an increase in the valuation of Canal Walk.

She said that after the initially when purchase of Canal Walk was bought there was a high risk on attached to income related to vacancies, and the upper floor of the shopping centre was problematic because the tenant base was "insufficient to draw sufficient shoppers".

Colin Young, fund manager of Old Mutual's locally listed property funds, said it was a "stunning performance" from Hyprop.

Young said Canal Walk was now performing and management had also reduced vacancies at the centre.

Last modified on Tuesday, 13 May 2014 11:48

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