Listed on the JSE in 1988, Hyprop, a real estate investment trust (REIT), is one of the pioneers and cornerstones of a South African listed property sector that today has a market capitalisation of over R250-billion. These latest results reflect not only the strength of the company but also the growth and opportunities achievable at the shopping mall end of the investment spectrum, as well as the increasing attention being paid by fund managers to the opportunities offered in the rest of sub-Saharan Africa. GK
Johannesburg – 29 August 2014 –BizNews
Hyprop Investments Limited, one of South Africa leading, and longest-standing JSE-listed property investment groups, has posted solid results for the year to end-June 2014.
Highlights included: an increase in revenue from R2,2-billion to R2,5-billion; total property assets up 17,5% to R26,4-billion; and a lift in investment property income from R2-billion to R2,4-billion.
The company, which is focused on investment in prime shopping centres in South Africa and elsewhere in sub-Sahara, made a total distribution for the year of 472 cents per unit – up 11,3% on 2013.
The dividend distribution for the second half, to 30 June 2014, was 13,1% higher than the same period in 2013 – due to strong like-for-like growth from the super and large regional shopping centres, savings on interest costs and the acquisition of African Land Investments Limited (African Land) in December 2013.
Looking ahead, Hyprop expects dividend growth of between 10% and 12% for the full year to 30 June 2015. This guidance is based on several key assumptions:
- forecast investment property income is based on contractual rental escalations and market related renewals;
- appropriate allowances for vacancies have been incorporated into the forecast; and
- no major corporate and tenant failures will occur.
Based in Rosebank Johannesburg, and listed on the JSE’s Real Estate Investment Trust (REIT) sector, Hyprop directly owns prime shopping centres in major metropolitan areas across South Africa. The core of the portfolio includes the Canal Walk in Cape Town; Rosebank Mall and Hyde Park Corner in Johannesburg; and other regional centres such as Somerset Mall; Clearwater Mall; the CapeGate Shopping Centre; and The Glen Shopping Centre.
The company’s growing investment in sub-Saharan Africa (excluding South Africa) now stands at R2,2-billion – held through Atterbury Africa, which is a joint venture between Hyprop, Attacq Limited (Attacq) and the Atterbury Group.
In line with its strategy, Hyprop is in the process of disposing of its stand-alone office portfolio as well as non-core retail assets Stoneridge Centre, Willowbridge and CapeGate Lifestyle. As a result, these assets have been classified as held-for-sale.
Other points worth noting on Hyprop’s 2013/4 performance include:
- Distributable earnings from regional, large regional, and super regional malls (excluding Somerset Mall, acquired 1 October 2013) increased by 9,5%, with average growth of 11,0% from The Glen, Clearwater and Woodlands
- Rosebank Mall continued to be impacted by its redevelopment, and distributable earnings decreased by R16,1 million – in line with budget
- Property expenses were well-contained with the cost-to-income ratio marginally lower at 34,4% (June 2013: 34,9%)
- Total arrears (excluding Rosebank Mall) at 30 June 2014 were R14,3 million – equivalent to 0,4% of rental income
Vacancies across the retail portfolio, which constitutes 95% of the total portfolio by gross lettable area (GLA), decreased to 1,2%.
