Hyprop’s strategy of owning quality shopping centres continues to pay dividends

admin January 22, 2016

JSE listed shopping centre real estate investment trust (REIT), Hyprop’s strategy of focusing on owning quality shopping centres for middle-to-higher income consumers continues to deliver a robust performance despite the sluggish economy.

Hyprop has continued its formidable track record of strong returns with an exceptional 15% increase in total distributions for the year to 543 cents a share.

Shareholders will be paid a dividend of 280,3 cents per share for the second half of the year, an increase of 16,3% on the prior corresponding period.

Hyprop’s strategy again proved its resilience with a focus on owning quality shopping centres for middle-to-higher income consumers delivering a robust performance despite the sluggish economy.

Maintaining its double digit growth in key indicators, total revenue and distributable earnings from investment property increased by 11,9% and 14,5%, respectively. Net asset value (NAV) per share rose 17,1% to R89,04 from R76,02 due mainly to an increase in the portfolio valuation. Hyprop’s closing share price of R121,00 at 30 June 2015 represented a 35,9% premium to NAV. CEO Pieter Prinsloo says proactive management of the portfolio continues to yield benchmark results.

“Ongoing strong demand for retail space in our shopping malls is reflected in our low vacancies of 1.3%.” The retail portfolio comprises 95,6% of total rentable area. Office vacancies dropped significantly to 8,3% from 13,8% as a result of new lettings at the Lakefield Office Park and Canal Walk offices. He adds that Hyprop’s focus on improving its shopping centre portfolio through reinvestment has paid off. “The redeveloped Rosebank Mall, which re-opened in October 2014, immediately began contributing to the group’s growth in distributions.” The extension to the Woolworths store in Canal

Walk is complete and the extension to the Somerset Mall Woolworths store is due for opening in October. Ongoing tenant mix improvements further boosted Hyprop’s performance, such as Hyde Park Corner’s new Cortina Court, which hosts high-end brands like Versace, Longchamp and Armani.

Clearwater Mall’s R37 million upgrade and extension is currently underway and set to house leading global fashion brands H&M, River Island and Top Shop.