Hyprop maintains strong liquidity

The Glen Shopping Centre in Johannesburg South.

Hyprop has provided an operational update for the four months ended October 2021, reporting an improved loan-to-value ratio, on a like-for-like basis, to 34% (June 2021: 37.2%) following the disposal of Atterbury Value Mart and Delta City Mall post yearend as well as R876 million received through an 85% uptake by shareholders of the share reinvestment alternative.

The REIT currently holds R1.6 billion cash and R900 million of unutilised revolving credit facilities.

However, the group has warned that the emergence of the Omicron Covid-19 variant is likely to impact most jurisdictions where it operates.

We are confident that the group’s strategy and key priorities remain relevant, even in a prolonged Covid-19 environment”, commented Hyprop CEO, Morné Wilken. “Our priorities over the next months are to complete negotiations on the Hystead liquidity event, continue strengthening the balance sheet, reposition the South African portfolio for future growth, increase the dominance of the Eastern European properties in our overall portfolio, and pursue our non-tangible asset strategy”.

It also reported a 4.6% increase in foot count in its local shopping centres and a 6.7% increase in its Eastern European shopping centres when compared to the same period in 2020. However, footfall has not yet reverted to pre-pandemic levels.

There has been an improvement in the performance of travel and entertainment tenants, as well as luggage and jewellery with only a few smaller tenants and cinemas still receiving assistance.

Hyprop’s retail vacancies in South Africa were 2.6% in October, having already shown a steady month-on-month improvement since end-June with tenant vacancies in Eastern Europe remaining low at 0.2%.

In its sub-Saharan Africa portfolio (excluding South Africa) most metrics are tracking above the same period in 2020 with Ghana’s footfall almost back to pre-Covid-19 levels. Hyprop continues its strategy to exit from its Sub-Saharan assets while actively managing them. However, because of the US dollar liquidity crisis in Nigeria, it has been impossible to close the sale of Ikeja City Mall, but progress is being made on the disposal of its three remaining malls in Ghana.

In South Africa, the group plans to launch its digital mall application in some of its malls in 2022 which will enhance its ability to communicate with shoppers and to offer a range of unique services.