One big beneficiary of improved trading conditions is super shopping centre Canal Walk, now 80% owned by retail property group Hyprop, which is finally hitting its straps more than five years after its opening.

In the year to end December Hyprop reported that retail vacancy at the 131 320 square metres Canal Walk shopping centre was reduced significantly through the consolidation of space and subsequent letting to larger retailers.

Since December 2003 retail vacancy has been reduced from 9 339 square metres (2,5% of lettable space) to just 4 113 square metres (1,3%). That’s vacancy figure that would make a centre a tenth of the size of Canal Walk proud.

A breakdown in performance figures released by Hyprop on Century City is also eye catching, and underline what a inspired deal it was for Hyprop to acquire the sprawling retail property from Nedcor in late 2003.

Hyptop’s proportion of Century City’s R1.8bn turnover was R1.46bn, which yielded a rather nifty R144m in profit.

That means Canal Walk – once considered too big for an already over-traded Cape retail landscape - yielded a net return on cost of 12.4% for the year.

Now does anyone out there think Nedcor sold this non-core asset too cheaply?

Foreshore-based property specialists Spearhead, who a few years ago re-jigged their portfolio to focus almost exclusively on Cape Town properties, is probably the stand-out contender in the South African property sector at this point. The group appears to be reaping some success in a renewed retail focus.

Last month the group reported a 43% rise in headline earnings, allowing the interim distribution to unitholders for the period ending December 2004 to be increased a whopping 19% to 95c/unit.

No doubt Spearhead’s earnings were enhanced by a number of recent retail aligned acquisitions in the greater Cape Town area.

These included Shoprite Claremont on Main Road in Claremont (R13m) and Edgars Wynberg (adjacent to Maynard Plaza).

Spearhead’s involvement in Cape Town property development looks like also paying off big time, and CEO Mike Flax says several new acquisitions, co-developments of existing and new projects were made.

These are mainly residential projects (South Seas near the Mouille Point lighthouse and Wembley Square) – but one wonders whether Spearhead may try their hand at some ‘boutique’ retail developments in the year ahead.

Recently Cape property stalwart Atlas, which has retail representing more than 50% of its portfolio, upped its distribution to shareholders 6% to 57c/linked unit.

It underlined its commitment to retail property when it developed a new double storey parking garage at Howard Centre in Pinelands and extensively upgraded the centre.

Directors say the expansion project, which cost R30m, at the Howard Centre is in line with Atlas’ strategy of investing in low risk quality retail properties. The upgrade bolsters an already strong retail component of Atlas, and directors have predicted further earnings growth in the new financial year. Atlas also owns the Garden Centre in Cape Town and a 50% interest in the Bayside Centre in Table View.

Now all eyes will be on Paramount Property after the group last year signalled a serious retail focus by snapping up the Golden Acre for R130m and the landmark Pick ‘n Pay building in Claremont.

Paramount has suffered from a problematic debenture structure that staunched dividend flows, and observers believe the bigger retail focus is ‘make or break’ for the group.

Judging by the upward trajectory of Paramount’s shares on the JSE it seems the smart money believes the group is set to wring some good earnings out of its new retail properties.