Hyprop Investments has announced an agreement with Hystead to acquire the remaining four assets within the Hystead Eastern European portfolio.
Hyprop currently owns 60% of Hystead, with PDI Investment Holdings owning the other 40%.
The core assets include Skopje City Mall in North Macedonia, City Center One East and City Center One West in Croatia, and the Mall of Sofia in Bulgaria. Hystead’s fifth property, Delta City Podgorica in Montengero, is in the process of being sold and Hyprop will retain its existing €45 million interest in the asset, representing 60% of the value, until the sale is complete.
The transaction will enable Hyprop to take full control of the Hystead acquisition properties by increasing Hyprop’s effective interest in the group’s Eastern European portfolio and aligning its economic interest with the acquired assets. It will also mitigate Hyprop’s exposure, optimizing Hystead’s capital structure and the group’s borrowing and gearing profile.
“The transaction is in line with our strategy to further diversify our exposure into Eastern Europe, mitigating the company’s risk to a weaker South African economy and will address some concerns previously raised by shareholders”, said Morné Wilken, CEO of Hyprop.
“Hyprop remains focused on creating safe environments and opportunities for people to connect and have authentic and meaningful experiences, thereby creating long-term sustainable value for all stakeholders.”
Hyprop is confident that its strategy and key priorities remain relevant, even in a prolonged Covid-19 environment and the focus for the Eastern European portfolio remains on retaining the dominance of the malls through active asset management initiatives and strategic redevelopments, leveraging the group’s SA expertise and know-how, securing rights for further mall extensions to satisfy tenant demand, and completing the refinancing or settlement of the equity debt.
Once the transaction is concluded and Delta City Podgorica is sold, the intention is to wind up Hystead which will include settling all Hystead’s outstanding debt and releasing Hyprop and PDI from all guarantees in the shareholders’ agreement.
Hyprop shareholders are advised to exercise caution in their dealings until a further announcement is made.
