Hyprop Investments has reported double-digit growth in distributable income of 14.5% to R765 million for the year ended 31st December 2024 with a 14.4% increase in distributable income per share to 201.4 cents per share.
“The solid performance for the period is a result of the transformative strategic priorities outlined in 2018. The improved trading metrics of our portfolios affirm our centres’ relevance in their respective markets, coupled with our shoppers’ loyalty and resilience during the challenging economic times,” says Morné Wilken, CEO of Hyprop.
“Our confidence is based on the fact that our centres in South Africa and Eastern Europe are located in key economic nodes and supported by our management teams who have strong retail property expertise.”
The REIT’s South African portfolio reported positive key trading metrics for the six months with a slight increase in vacancies to 2.4% (excluding Pick n Pay at Hyde Park Corner, where Checkers has been secured as a replacement tenant). Wilken says this is mainly due to rightsizing some anchor tenants’ stores and the low vacancy rate creating flexibility to improve and optimize the Group’s tenant mix.
Its South African tenants’ turnover rose 4.9% compared to the same period in 2023 while trading density lifted by 4.4%.
During the period, Hyprop’s management focused on pursuing organic growth opportunities such as the Somerset Mall expansion and the development of satellite offices around CapeGate Shopping Centre on a leasehold basis. At Canal Walk, the Western Cape’s only super-regional, new concepts such as the first JD Sports in the country, the first stand-alone Silki store in South Africa, and the maiden flagship store for Shift Espresso Bar were introduced. The Edgars store on the first floor is trading well after its rightsizing with the space it vacated re-let to Jet Home. Tech. Sleep and another national tenant.
In Gauteng, Rosebank Mall has introduced several unique concepts and completed various projects including upgrades for Tap & Go/Apple Pay at all pay stations and the control room, as well as the installation of e-hailing screens in the waiting areas. A new Checkers FreshX store is under construction at Hyde Park Corner and is scheduled to open in July 2025. Clearwater Mall, Woodlands and The Glen have opened several new stores.
The South African portfolio’s distributable income grew to R454 million in the six months. Excluding Table Bay Mall, rental and other lease income increased by 4% compared with the same period in 2023 and total revenue was up 4.7%. Utility costs were lower than in the comparable period due to the reduction in load shedding and the additional solar plants commissioned at Woodlands, Clearwater and Table Bay Mall. Net property income increased by 18.6% (10.7% excluding Table Bay Mall) over the first half of the 2025 financial year.
In its Eastern European (EE) portfolio, tenants’ turnover grew 8.8% with trading density increasing by 7.1%. Hyprop says there is strong demand for space in its four centres which is reflected in its 0.2% vacancy rate as at 31st December 2024.
Distributable income from the EE portfolio was R308 million, an increase of 34% over the comparable period. In Euros, total revenue increased by 11%, due to indexation increases and strong growth in turnover-based rentals. Property expenses rose 9%, mainly because wages across the region increased, resulting in a 12% improvement in operating income.
As a result of the recent sale of its sub-Saharan Africa portfolio (excluding South Africa) to Lango Real Estate, in exchange for shares, Hyprop has been released from all guarantees and commitments to lenders relating to the Africa debt.
Hyprop maintained a strong liquidity position during the period, holding R807 million in cash and R1.1 billion in available bank facilities. Its balance sheet reflects a loan-to-value (LTV) ratio of 36.3% with cash collections of 99.8% from its South African and Eastern European tenants and 100.8% of net billings.
Hyprop’s board decided to increase its dividend payout ratio to a payment of an interim dividend equivalent to 95% (previously 90%) of the distributable income from the South African portfolio and payment of a final dividend on finalisation of the Group’s annual audited results, so that the total distribution for the financial year (including the interim dividend) is equivalent to 80% (previously 75%) of the Group’s distributable income from the South African and EE portfolios.
The Group declared an interim dividend of 113.43 cents per share, equating to 95% of the distributable income from the South African portfolio for HY2025.
“Hyprop’s management team will pursue its five strategic initiatives: pursuing new and organic growth opportunities; repositioning in South Africa and Eastern Europe to maintain the centres’ dominance and grow market share; annually review and, if appropriate, recycle assets; implement sustainable solutions to offset infrastructure challenges in South Africa; and protect the robustness of the balance sheet,” concludes Wilken.
