Listed property loan stock company Hyprop Investments has declared an interim distribution per combined unit of 91 cents, an 18% increase on that declared a year earlier.
The group, which has a portfolio now valued at almost 4.0 billion rand, is forecasting growth of 12% for the year as a whole, it said in its interim results.
Hyprop's property portfolio includes well-known region retail shopping centres such as Canal Walk in Cape Town, Hyde Park and The Mall of Rosebank in Johannesburg, Southcoast Mall in Kwa-Zulu Natal and The Glen.
The group posted a 17% increase in distributable earnings to 93 cents a unit for the six months to June 2005, with its portfolio reaping the benefits of ongoing growth in rentals.
Since December 2004, net asset value rose by 10% to 19.54 rand per unit on the back of an 8% increase in the fund's portfolio valuation to almost 4.0 billion rand. The higher portfolio value helped to maintain gearing at 28% in the face of a slight increase in borrowings to 972 million rand.
Hyprop already paid its distribution for the six months of 91 cents per unit, an 18% increase over the same period in 2004. Non-recurring income of approximately 4 cents a unit contributed to the exceptional growth in distributions, arising from a reversal of a previous bad-debt provision at Canal Walk and distributions received by Hyprop on its 14.9 million linked units in SA Retail Properties.
The group said its pending offer to linked unit holders of fellow property group SA Retail remained subject to approval from the competition authorities, with a decision expected shortly.
In addition to its 14.9 million SA Retail units, Hyprop also has an undertaking in respect of 55.9 million SA Retail linked units to accept its offer, giving Hyprop a 31% interest in SA Retail.
Commenting on the results, Hyprop MD Pieter Prinsloo said: "The retail portfolio continues to strengthen with 23 million visitors to Hyprop's centres in the six months since December, 10% higher than the number of patrons in the same period last year."
With retailers' sales booming thanks to buoyant consumer spending, Hyprop maintained low vacancies at its shopping centres. Only 1.6% of its retail portfolio was available for letting at June 2005.
"The increasing demand for retail space is helping to further boost rental levels," noted Prinsloo, highlighting the benefit for Canal Walk where a large portion of leases are due for renewal in the next six months.
The office portfolio continued to recover and vacancies were again down to 4% of the commercial portfolio as tenant demand for premises improved in the previously saturated market.
Maintaining its focus on retail properties, Hyprop sold two office buildings for R14.2 million and completed the 91 million rand extension to the Glen Shopping Centre. In addition, Hyprop's and Redefine's Southcoast Mall in Shelly Beach, Kwa-Zulu Natal should open as scheduled in November 2005. Prinsloo was positive about the centre's prospects in light of the ongoing residential developments in the area.
