All of Hyprop Investments’ dominant retail centres in SA and Eastern Europe have recorded more buoyant trading conditions over the past few months.
In its pre-close operational update, the REIT said foot count throughout its local centres continued positive trends with a 7.1% increase in the four months to end-October 2022 when compared to the same period in 2021. Black Friday was 8% higher in 2022 than in 2021 with tenant turnover for the four-month period having grown by 16.9%. With its retail vacancies remaining low at 1.3%, demand for retail space remains robust and many of its retailers are trading better than they were pre-pandemic.
Some of the new store openings across its portfolio include Scape Goat Gallery, George’s Grill House, and Versailles Luxury at Hyde Park Corner; Huawei, Cosmic Comics and Freedom of Movement at Clearwater Mall; and at Canal Walk, South Africa’s first Nike Live store as well as the Western Cape’s first Xaomi and SPCC stores.
At Ikeja City Mall in Nigeria ( its Sub-Saharan Africa ex-SA portfolio), trading at the new Nike store has exceeded expectations since its opening in August 2022. The centre is performing well with one vacancy of 166m² and Hyprop is working with Actis to implement the sale of Ikeja while considering various options, including a partial sale of our investment.
In Ghana, turnover and trading density have been hit by the 144% depreciation of the Ghanaian cedi against the US dollar since January 2022. However, vacancies have reduced to 12.7% in October from 13.4% in June as a result of focused asset management. Accra Mall, West Hills Mall, and Kumasi City Mall are all celebrating new store openings. An exit agreement was concluded with Game in Ghana and there is good progress in re-letting their space.
In Eastern Europe, tenant turnover, trading density and foot count have improved significantly since the lifting of Covid-19 restrictions earlier this year withs its centres performing well over the Black Friday weekend, with foot count up 19.6% on the Friday and 23.1% on the Saturday compared with the previous year. However, increased costs of electricity, fuel and gas are driving inflation in EE, which impacts tenant occupancy costs.
“We are closely monitoring tenant performance on a monthly basis and have granted temporary rent relief to some tenants in exchange for future rental escalations and longer lease tenure,” CEO, Morne Wilken says.
Hyprop reports that it held R2.4 billion of unutilised revolving credit facilities and R814 million in cash at 31 October 2022. Its loan-to-value (LTV) ratio was 38.2%, after paying the dividend for the 2022 financial year and implementing a dividend reinvestment plan (DRIP), which raised R500 million in new equity and was supported by 84.4% of shareholders.
The REIT’s interim results for the six months ended 31 December 2022 are scheduled to be released in March 2023.
