Hyprop is the fourth-largest listed property company on the JSE, with a market capitalisation of just under R5bn.

Marc Wainer, executive director of Madison, the asset managers of Hyprop, said yesterday that the acquisition of the V&A would be too dilutive to Hyprop’s earnings. “We’ve looked at it carefully and looked at the numbers and decided we’re not going to continue bidding,” said Wainer.

“We felt it was an asset that wouldn’t give us the kind of growth we are looking for and for the price we would have to pay, it would have been too dilutive.”

Wainer said he expected the V&A to be sold for between R6bn and R7bn.

He said Hyprop would not have minded a bit of dilution as long as the asset had better than average earnings growth potential, and development potential.

Much of the development potential at the V&A was residential, which was not Hyprop’s business, he said.

Hyprop is a retail-focused property company with retail properties such as Canal Walk shopping centre in Cape Town in its portfolio.

In May Transnet and two of its pension funds launched a process to sell a majority stake in the V&A by September. CEO Maria Ramos said only offers for at least a 25% stake would be considered.

Growthpoint, the largest listed property company on the JSE, is understood to be one of the contenders for the V&A.

At its financial results presentation last month Growthpoint management confirmed that the company was interested in the landmark Cape Town property.