Hyprop Investments Limited has published its interim results for the six months ended December 2023, following the Competition Tribunal unconditionally approving its acquisition of Table Bay Mall in Cape Town.
Having raised R500 million of new capital during the period through its FY2023 dividend reinvestment plan (DRIP), the REIT is in a strong liquidity position with R1.6 billion of cash (R500 million earmarked for the Table Bay Mall acquisition) and R1.7 billion of available bank facilities (R250 million earmarked for the Table Bay Mall acquisition).
Its loan-to-value (LTV) ratio increased from 36.3% in June 2023 to 37.4% with its interest cover ratio (ICR) decreasing from 2.8 times to 2.3 times. The company refinanced R4.2 billion of borrowings at lower margins and secured R1.6 billion in new facilities.
Hyprop’s South African portfolio’s tenant turnover increased by 5.6% with trading density having grown by 4.9%. Average monthly foot count increased to R7 million, reflecting a 5.8% increase year-on-year. 1.3% retail vacancies were recorded with its weighted average rent reversion rate improving significantly to 3%.
Its Eastern European (EE) portfolio continues to deliver double-digit growth for most of the centres’ key performance metrics. Tenant turnover registered an increase of 12.5% with trading density maintaining a positive trajectory, delivering 12.2% growth. The EE portfolio’s vacancy rate remained low at 0.3%.
However, strong performance by both its South African and EE portfolios were dampened by the anticipated increase in interest rates and foreign exchange losses incurred by Ikeja City Mall in Nigeria. Hyprop realised foreign exchange losses of R33 million in Nigeria on the conversion of Nairas to US Dollars with concessions granted to tenants due to the country’s current volatility.
Distributable income for HY2024 was R668 million, a decrease of 8.3% with distributable income per share reducing by 13.4% from 203.4 cents in HY2023 to 176.1 cents in HY2024. Its 8% growth in net operating income (in euros) from its EE portfolio was augmented by the 15% devaluation of the Rand against the Euro.
Considering the current major risks which include the significant devaluation of the Nigerian Naira, the challenges that SA retailers face, and the likelihood of interest rates remaining higher, Hyprop’s board did not declare an interim dividend for the reporting period.
