Hyprop Investments has posted its pre-close operational update for the five months ended May 2024, having acquired Table Bay Mall in late March with internal approval to expand Somerset Mall by an additional 5 400m2 of GLA.
Hyprop’s operational performance continued to improve steadily during the period with foot count in its South African portfolio having increased 5.7% when compared to the prior comparable period with tenant turnover having creased by 2.1%. Its vacancy rate recorded 1.7% (1.9% including Table Bay Mall) as at 31 May 2024 with several refurbishments, relocations, and new store openings across the portfolio.
Positive rental reversions for the eleven months ended 31 May 2023 were +3.7% compared to +3% for HY2024.
Its Eastern European portfolio also achieved strong operational results to 30 April 2024 when compared to the previous period, with an 8.7% increase in tenant turnover and 0.5% improvement in foot count. Vacancy rates remained stable at 0.2% with a +3.7% weighted average rent reversion rate for the ten months ending 30 April 2024.
The risks associated with the Group’s investments in Nigeria remain elevated however, it says progress is being made with the disposal of its assets in sub-Saharan Africa.
Between January and April 2024, a further significant devaluation of the Naira affected the Nigerian economy with the official exchange rate depreciating from N950/$1 in January 2024 to its weakest level of N1 620/$1, before closing around N1 200/$1 at the end of May 2024 with fuel prices having soared to a new record at the end of April. The inflation rate also peaked at 33.7% with food inflation recording above 40%.
Rentals at Ikeja City Mall are indexed to the US dollar which places pressure on tenant affordability. To alleviate some of the financial pressure, the mall assisted tenants in good standing between January and March 2024.
The conditions precedent for the sale of 50% of Ikeja City Mall have not been fulfilled by the longstop date however, Hyprop notes it has signed a letter of intent with another party for the sale of the entire sub-Saharan portfolio.
Hyprop’s balance sheet remains healthy with the acquisition of Table Bay Mall financed utilising R500 million available cash, R250 million revolving credit facilities, and R900 million raised through the issue of two unlisted bonds (with durations of two and three years) under the Domestic Medium Term Note Program. R500 millions worth of DMTN bonds matured in March 2023 and two new DMTN bonds were issued in April 2024 at attractive margins of 120 basis points for three years and 130 basis points for five years.
In addition to the amortisation of in-country borrowings in the Eastern European portfolio, €20 million of equity debt was settled in April 2024, and a new €10 million revolving credit facility secured, which is undrawn.
Following the acquisition of Table Bay Mall, the Group’s LTV increased to 40.2% from 37.4% in December 2023. The Group’s interest rate exposure is currently 85% hedged.
The in-country bank loans for the sub-Saharan African portfolio are in the process of being refinanced ahead of their maturity dates in December 2024 and February 2025. An additional $8 million of the AttAfrica Group debt has been guaranteed by Hyprop.
