Roy Cokayne
HYPROP, the listed retail property fund, is to redevelop the Rosebank Mall in Johannesburg at a cost of about R920 million and has taken a major step towards expanding its presence and investments in Africa.
Hyprop chief executive Pieter Prinsloo said yesterday that it had entered into an agreement with the Atterbury Group as a co-investor in Atterbury Africa.
The Mauritian-based property investment company’s primary strategy was to develop and own quality shopping centres in Africa with a US dollar-based income stream.
Prinsloo said Hyprop’s initial shareholding in Atterbury Africa was 37.5 percent and the firm was committed to invest R750m in the fund over the next five years, and its investment in Atterbury Africa was still subject to exchange control approval.
This is not the first transaction between the two companies. Effective from September 1, last year, Hyprop acquired Attfund Retail for R9 billion, which made Hyprop the third-largest JSE-listed property fund behind Growthpoint and Redefine.
Atterbury Africa recently bought a 42.5 percent interest in the Accra Mall in Ghana.
Prinsloo said the main focus of Atterbury Africa was on Ghana and the company had identified two other developments it wanted to pursue, one of which was likely to commence before the end of this year.
Atterbury Africa was also considering development opportunities in Zambia and Mozambique.
Prinsloo added that Atterbury Africa had four projects in the planning stage and he expressed confidence that it would be able to invest all the money earmarked for development, while all these projects would be open and operational within the next five years.
Hyprop’s entry into the African market represented a diversification by the fund and stressed it had not stopped investing in South Africa, he said.
“We will invest in South Africa if opportunities arise and centres are for sale. But opportunities in the South African market are very difficult to come by at the moment and it is also very competitive.
“Our main joint focus is to primarily develop and own quality shopping centres in Africa, which as a growing emerging economy offers substantial opportunities.”
Prinsloo said Hyprop’s board had given its approval for the R920m redevelopment of the Rosebank Mall last month.
The project involves the complete redevelopment of the mall, with a reconfiguration of the mall areas and expansion of the shopping centre from 36 000m² to 62 000m².
Prinsloo said the redeveloped mall would accommodate some major new tenants, including an 8 500m² Woolworths store and a 6 000m² Edgars store, while Dischem Pharmacy would take up a 2 000m² area.
The mall would retain the bulk of the existing tenants.
Construction has started and the project is expected to take 24 months to complete.
Meanwhile, the company said yesterday that it had increased its distributions a combined unit to R1.98 in the six months to June from R1.81 in the previous corresponding period.
Trading conditions were stronger, particularly at their larger malls. It achieved savings on interest costs and a healthier performance from the Southern Sun Hotel Hyde Park, while also deriving greater benefit from its investment in Sycom on the back of its improved performance, Prinsloo added.
Vacancy levels were lower at 3.8 percent, compared with 4.1 percent in December, while demand for shops remained healthy in the super regional and large regional malls, with virtually no vacancies.
The improved distribution growth for the first six months has resulted in the company increasing its distribution growth forecast for the year to December to between 5 percent and 7 percent.
Combined units in Hyprop Investments advanced 1.09 percent yesterday to close at R70.35.