Morne Wilken
Hyprop CEO
Hyprop Investments Limited has shown strong performance in its South African and Eastern European portfolios, exceeding its previous guidance and reflecting resilience amid a tough economic backdrop. Here’s a summary of the company’s recent performance and future outlook:
Financial Performance and Dividends
Distributable Income: For the year ending 30 June 2024, Hyprop reported a distributable income of 370.4c per share, an 8.6% decrease from the previous year’s 405.2c. This was better than the forecasted 15-20% decline.
Dividend: A final dividend of 280c per share was declared, down from 299.3c in 2023, in line with the policy of distributing 75% of distributable income from SA and EE portfolios.
Key Drivers of Performance
SA and EE Portfolios: Strong regional performance, effective cash management, and lower hedging costs contributed to better-than-expected results.
Challenges: High short-term interest costs, foreign exchange losses, and the timing of the SSA portfolio sale impacted the financial results.
Acquisitions and Sales
Table Bay Mall Acquisition: Acquired for R1.68 billion and successfully integrated into Hyprop’s portfolio.
SSA Portfolio Sale: Hyprop agreed to sell its SSA portfolio, including properties in Nigeria and Ghana, to Lango Real Estate Limited for Lango shares. This strategic move allows Hyprop to focus on its core SA and EE portfolios.
Portfolio Performance
South Africa: Despite economic challenges, Hyprop’s nine SA centers saw improved tenant turnover, foot traffic, and trading density. Noteworthy developments include Canal Walk’s addition of 20 new stores and renovations at Hyde Park Corner.
Eastern Europe: The EE portfolio performed well with increased trading density and low retail vacancies. The portfolio valuation rose to €610 million (R11.9 billion) from €574.7 million (R11.8 billion) in June 2023.
Sub-Saharan Africa: Economic challenges in West Africa affected performance. However, Ikeja City Mall saw a vacancy rate below 1%, and new tenants were secured in Ghana.
Financial Health
Loan-to-Value (LTV) Ratio: Maintained at 36.4%.
Liquidity: Strong, with R803 million in cash and R2 billion in available bank facilities. 80% of interest rate exposure is hedged.
Sustainability Initiatives
Hyprop invested R81 million in energy projects, including solar PV installations, and R21.7 million in waste reduction and recycling.
Outlook for 2025
CEO Morne Wilken anticipates a 4-7% increase in distributable income per share, depending on factors such as rental escalations, economic stability, and the absence of regional disruptions.
Hyprop remains optimistic about future growth, supported by strategic acquisitions, strong portfolio performance, and a focus on core regions. The company is well-positioned to navigate economic challenges and capitalize on opportunities in the coming year.