Retail property fund Hyprop's latest operational update for the four months ending 31 October 2024 highlights continued growth in key trading metrics, successful leasing strategies, and progress on development projects across its portfolio in both South Africa and Eastern Europe.
The company's focus on creating vibrant, mixed-use precincts has continued to drive growth, with key investments in tenant upgrades, energy sustainability, and water management projects ensuring both tenant and consumer satisfaction.
Hyprop's South African portfolio showed continued improvement in trading metrics. Tenant turnover and trading density saw positive growth, bolstered by the company's ongoing efforts to reposition and enhance its nine centres.
This includes a focus on tenant mix optimisation and extensive investments in energy solutions and backup power, ensuring uninterrupted operations in areas prone to infrastructure challenges.
Retail vacancies were well-controlled at 2%, while office vacancies significantly improved to 17.7% from 27.4% during the same period last year.
The period also saw several new stores open, including unique firsts for South Africa. Canal Walk in Cape Town, for example, welcomed new concepts such as Old School, Baseus, and Silki, while Somerset Mall added major international brands like Hi-tec, Samsonite, and Steve Madden.
The redevelopment of Somerset Mall is progressing with the addition of 5,500m² of Gross Lettable Area (GLA), expected to complete by July 2026.
This expansion will add 50 new stores and introduce a range of exciting brands, further solidifying Somerset Mall's dominant position in the market.
Other centres like Table Bay Mall, Capegate, and Rosebank Mall also saw new store openings and refurbishments. Hyprop has also focused on sustainability, with Capegate’s roof refurbishment nearing completion in preparation for the installation of a 5 MW solar plant, expected to be operational by FY2025.
Hyprop’s Eastern European portfolio has continued to perform well, with strong growth in tenant turnover and trading density.
The company’s ongoing asset management initiatives and strategic upgrades have helped maintain the dominance of its centres in the region, allowing Hyprop to benefit from the overall retail growth in Eastern Europe.
Hyprop said its balance sheet remains strong, with R575 million in cash on hand and R1.2 billion in available bank facilities at the end of October 2024.
The company has continued its strategic efforts to strengthen its financial position, including the disposal of its sub-Saharan Africa (SSA) portfolio, which resulted in an improved loan-to-value (LTV) ratio and increased interest cover.
The company’s liquidity position remains robust, with cash collections from tenants in both the South African and Eastern European portfolios reaching 99% of net billings for the period.
Hyprop also secured a stable outlook from Global Credit Ratings (GCR), which affirmed its long-term ratings at BB- and A+(ZA).
Hyprop’s management is optimistic about the company’s future prospects. With significant capital expenditure underway to enhance its South African portfolio, particularly through the expansion and refurbishment of key centres, the company said it is well-positioned to capitalise on opportunities for growth.
Hyprop's share price is up nearly 67% over the past year, rising to R42.70, from R17.08.
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