Hyprop Investments Limited has published its interim results for the six months ended December 2022 reporting a 36% increase in its distributable income to R728 million and a 30% increase in its distributable income per share to 203 cents compared to 156.9 cents in December 2021. Eastern Europe delivered R243 million of distributable income during the period, exceeding the FY2023 forecast by approximately 15%.
“The positive momentum across the South African and Eastern European portfolios demonstrates our responsiveness to our tenants’ and shoppers’ needs, whilst embracing relevant technologies – despite the current challenging operating environment. This set of results is testament that we are well on our way to delivering on our purpose of creating spaces and connecting people,” commented Hyprop CEO, Morné Wilken.
During the six-month period, the REIT focused on strengthening its balance sheet and liquidity position, raising R500 million in additional capital through the FY2022 DRIP and reducing its euro borrowings by €29 million. As at 31 December 2022, the group held R1.4 billion in cash and R2 billion in available bank facilities. Its loan-to-value (LTV) was 37.2% at the end of December 2022 from 36.4% at the end of June, largely due to the weakening of the Rand against the Euro.
Hyprop will be raising R500 million (with the potential upside to R750 million) via a bond auction on the 31st of March 2023. Proposals have been received to refinance the R1.46 billion debt that matures in June 2023, and are being adjudicated.
Tenant turnover rose 15.5% year-on-year with a good performance from its December trading. Canal Walk reached record turnover of over R1 billion during that month. Trading density lifted by 14.4% and foot count rose by 5.9% to 39.6 million people. Demand for retail space remained robust during HY2023 with retail vacancies reducing to 1.5% from 2% in June 2022.
Eastern European portfolio
The Eastern European centres performed well, with tenant turnover up 14.1% year-on-year and foot count 16.1% higher at 13.9 million. The vacancy rate was only 0.6% at end-December.
Sub-Saharan Africa (excluding SA) portfolio
Overall, portfolio vacancies in the SSA centres have decreased to 7.8% in December 2022 from 10.1% in FY2022. Although Game exited Ghana at the end of the period, there has been progress in identifying replacement tenants. Foot count across the portfolio decreased by 7% year on year, with turnover and trading density in Ghana being impacted by the depreciation of the Ghanaian Cedi against the dollar.
The lack of dollar liquidity in Nigeria continues to delay the completion of the sale of Ikeja City Mall.
“In light of the difficult global economic environment and unique challenges in each of the regions in which we operate, such as the deteriorating infrastructure in SA, high inflation and energy costs in EE and unavailability of US Dollars in SSA, we remain cautious in terms of our short to medium-term prospects. However, we believe that we have created a solid base from which we will continue to execute our key strategic objectives and deliver long-term value for all our stakeholders,” Wilken concluded.