Morné Wilken
Hyprop
CEO
Hyprop Investments, the JSE- and A2X-listed retail real estate investment trust (REIT), closed the year to 30 June 2025 on a firm footing, reporting strong distributable income growth, improved property valuations, and balance sheet strength. The group declared a total dividend of 307.7 cents per share, up 9.9% year-on-year, reflecting confidence in both its South African and Eastern European portfolios.
Earnings outperformance
Group distributable income rose 7.5% to R1.51bn, supported by solid trading across its shopping centre portfolio and the successful integration of newly acquired assets. Distributable income per share (DIPS) advanced 2.3% to 378.8 cents, exceeding the revised pre-close guidance of -1% to 2% growth issued in June 2025.
Management credited several drivers:
Table Bay Mall contributed a full year of earnings following its FY2024 acquisition.
SA malls maintained robust trading conditions, with tenant turnover up 5.5% and trading density rising 6.8%.
The Eastern Europe (EE) portfolio delivered 24% income growth in Euro terms (20.5% in Rand), underpinned by healthy consumer demand, operational efficiencies, and currency tailwinds.
Hyprop declared a final dividend of 159.4cps, maintaining a higher payout ratio first flagged at the interim stage. The payout remains fully covered by distributable income, with strong cash flows supporting sustainability.
Portfolio valuations and NAV uplift
Independent valuations increased the group’s combined South African and EE portfolios by R2.4bn during the year, reflecting both income growth and firmer capitalisation rates as interest rates eased. The revaluation boosted Hyprop’s net asset value (NAV) per share to R74.90, further underlining asset resilience despite global volatility.
The SA portfolio, valued at R29.4bn, benefited from continued retailer demand for prime space and strategic refurbishments. EE assets, valued at R12.6bn, sustained near-full occupancy and rental growth above inflation.
Balance sheet resilience
Hyprop strengthened its financial position, reducing its loan-to-value (LTV) ratio to 33.6% from 36.4% in FY2024. The improvement was underpinned by disposals of non-core Sub-Saharan assets, the R808m equity raise in June 2025, and fair value uplifts across the portfolio.
At year-end, Hyprop held R1.2bn in cash and R2.5bn in undrawn debt facilities, providing flexibility for asset management, further solar PV roll-outs, and acquisition opportunities, including the potential MAS Real Estate transaction flagged earlier in the year.
The weighted average cost of debt declined to 9.73% (FY2024: 10.27%), reflecting favourable refinancing activity and the 100bps repo rate cut during the period. The weighted average debt expiry stood at 2.2 years, with post-year-end refinancings extending this to 2.3 years.
South African operations
Hyprop owns nine flagship centres across Gauteng and the Western Cape, with stable shopper traffic of 7.2 million visits monthly. Performance highlights included:
Vacancies rising modestly to 4.2% due to Edgars’ and Pick n Pay’s rightsizing, but creating opportunities for stronger brand replacements.
New tenants included JD Sports (Canal Walk), Lego, Anta and Napapijri (Somerset Mall), and Workshop 17 flexible offices (Hyde Park Corner). Post year-end, Checkers FreshX opened at Hyde Park, driving a 10% increase in foot and vehicle counts.
Somerset Mall Phase 2: A R350m expansion project adding 5,500m² GLA, set to lift the store count from 180 to 230. The affordable luxury and athleisure section opens November 2025, followed by a family entertainment and food court in July 2026.
Capital expenditure for FY2025 totalled R506m, including solar installations, fire and water system upgrades, and tenant refurbishments.
Hyprop also installed one of South Africa’s largest hybrid energy systems at Rosebank Mall, providing seamless backup power and enabling energy arbitrage. Water resilience was boosted with potable water tanks installed at all Gauteng centres, covering three days’ supply.
Sustainability remains a core theme: five Gauteng malls achieved net zero waste status, while group recycling rates climbed to 77% (FY2024: 68%), diverting over 1,100 tonnes of organic waste from landfill.
Eastern European growth
The EE portfolio – spanning centres in Croatia, North Macedonia and Montenegro – maintained exceptional operating metrics:
Tenant turnover rose 6.6%, ahead of inflation.
Trading density advanced 6.1%, with near-full occupancy of 99.9% and vacancies at only 0.1%.
City Center One West introduced a revamped food court with five new restaurants. Skopje City Mall expanded its premium electronics offering and launched a rooftop open-air cinema post year-end.
The EE assets continue to benefit from strong demand for modern retail formats in undersupplied markets. Hyprop remains confident in the region’s structural growth story, with management highlighting resilient tenant performance and sustained consumer spending.
Capital recycling and transactions
Hyprop advanced its capital recycling programme, agreeing to sell 50% of Hyde Park Corner to Millennium Equity Partners, with a put-and-call option on the balance exercisable in two years. The transaction, expected to transfer in November 2025, is aligned with Hyprop’s strategy to recycle capital from mature assets into higher-yielding opportunities.
Proceeds will be deployed into debt reduction, organic growth projects, and selective acquisitions. CEO Morné Wilken emphasised that the capital raise and asset sales would underpin continued balance sheet strength and shareholder value creation.
Innovation and tenant demand
Hyprop continues to adapt to shifting consumer trends by integrating experiential and lifestyle tenants:
Omoda, an automotive retailer, opened a dealership within The Glen, reflecting new retail categories.
Workshop 17 introduced co-working space at Hyde Park Corner.
Premium global brands including Lego and JD Sports were rolled out, underscoring strong retailer demand for Hyprop’s centres.
Tenant demand for space across both geographies remains robust, evidenced by rental reversions achieved at above-inflation levels and continued low vacancy rates.
Sustainability and ESG initiatives
Environmental initiatives were scaled up, with solar PV capacity expanded across SA malls. At Rosebank, the hybrid system reduces load-shedding exposure and manages energy costs effectively. Air-conditioning systems at Woodlands and Clearwater are being upgraded to R410 eco-friendly refrigerants, with water-saving benefits.
The AquaIntell water monitoring system achieved savings of over 53,000kl in nine months, equivalent to 21 Olympic-sized swimming pools.
The Hyprop Foundation and CSI spend reached R16.6m, directed to education, community upliftment and enterprise development.
CEO commentary and outlook
CEO Morné Wilken hailed the results as evidence of “strategic consistency and operational resilience”:
“The sterling performance of our South African and Eastern European centres in FY2025 is testament to the strategic decisions we have taken over the past six years and the hard yards we have put into ensuring our centres remain competitive, sustainable and relevant.”
Looking ahead, Hyprop guided for 10%–12% growth in DIPS in FY2026, premised on:
Prime and JIBAR rates stabilising at current levels.
Contractual rental escalations and market-related renewals.
Sustained demand in Eastern Europe.
No major tenant defaults.
The group remains confident in delivering superior, sustainable returns through disciplined capital allocation, portfolio optimisation, and operational innovation.
Investor takeaway
Hyprop’s FY2025 results place the group firmly among the better-performing JSE REITs. With a reduced LTV, strong liquidity, dividend growth near double digits, and robust operational momentum across both South Africa and Eastern Europe, the group enters FY2026 well-positioned.
Its dual-geography exposure continues to mitigate domestic macro risks, while the shift to sustainability and experiential retail strengthens long-term competitiveness. For institutional investors and analysts, Hyprop’s commitment to balance sheet discipline and a 100% payout ratio offers a compelling yield-and-growth story in a sector regaining traction post-pandemic.