The owner of premium shopping centres in South Africa reported an increase in distributions and net income for the six months to June.

Top retail property, Canal Walk in Cape Town is a super regional mall valued at R4.800million. Its footcount is 20 735 099 and one percent vacancy rate.

Hyprop Investments Limited, a listed property company on the Johannesburg Stock Exchange (JSE) recorded a 9.7 percent increase in net income from shopping centres and its distributions for the interim period were up 4 percent to 181 cents per unit.

Hyprop with an estimated market capitalisation of R8.9billion is the third largest listed property company on the JSE.

Growthpoint Properties is the top company with a market capitalisation of R29.1billion followed by Redefine Properties Ltd with a market capitalisation of R21.7billion.  

Pieter Prinsloo, chief executive officer says the high quality of Hyprop’s shopping centres ensured continued growth with like-for-like revenue up 10.5 percent and property assets increased by 3 percent to R11.6billion in value.

“Vacancies remained unchanged for the period at 3.9 percent and there is strong demand for store space in the super regional and large regional malls,” says Prinsloo.

Its top properties by value include Canal Walk in Cape Town, Clearwater Shopping Centre in Johannesburg, Woodlands Boulevard in Pretoria, The Glen in Johannesburg, Cape Gate Precinct in Cape Town, Hyde Park Corner in Johannesburg, The Mall of Rosebank in Johannesburg and Atterbury Value Mart in Pretoria.

The company’s majority of property assets are located in Gauteng and the Western Cape.

“We intend focusing on investing in large shopping centres going forward.”

Hyprop will be redeveloping The Mall of Rosebank and Rosebank Gardens in Johannesburg. Construction is expected to commence in 2012 and will be completed in 2013.

The redevelopment of The Mall of Rosebank will increase retail space from 37 000 square metres to 60 000 square metres at a cost of R900million.

The artist impressions of the new look of The Mall of Rosebank in Johannesburg. The redevelopment will cost R900million. This regional mall is valued at R948million and enjoys a footcount of 9 817 871.

Prinsloo explains that the downturn in the hospitality industry impacted negatively on the performance of the fund’s hotels, The Grace Hotel in Rosebank and Southern Sun Hyde Park.

Hyprop announced last month that The Grace Hotel will close at the end of August. African Sun Hotels who operated the hotel was not able to achieve a financially viable model to facilitate the continuation of hotel operations and both parties elected to terminate the lease agreement.

“We have been approached by various interested parties for The Grace Hotel property and are optimistic of announcing a solution in this regard in due course,” says Prinsloo.

He says the company’s enterprise development vehicle Vunani Property Investment Fund listed on the JSE in August. Hyprop sold 50 percent of its interest in Vunani for R100million and now holds a 15 percent stake in the listed fund.

“Over time, our strategy is to exit Vunani as this is not a core investment asset.”

Hyprop intends selling non-core assets for exclusive focus on large, prime shopping centres in key urban locations.

Prinsloo says the focus in the immediate term will be bedding down the R9bilion Attfund Retail acquisition.  The acquisition includes shopping centres across Gauteng and the Western Cape.

“The acquisition is set to almost double Hyprop’s asset base to around R20billion and boost market capitalisation to just under R14billion.”

He adds that subject to market volatility and trading conditions remaining positive for retail, they expect to see improved distribution growth over the next six months to year-end.  – Denise Mhlanga

Readers' Comments Have a comment about this article?  Email us now.