Hyprop, the listed retail property fund, has increased its investment in its expansion into Africa to R3 billion from R750 million.
Pieter Prinsloo, Hyprop’s chief executive, said on Friday it aimed to have fully invested the R3bn in retail property assets within the next five years, which on current values would make up about 15 percent of Hyprop’s asset base.
He said Hyprop’s investment vehicles in Africa comprised Atterbury Africa, which was focused on new retail developments, and African Land, which had a mandate to acquire existing shopping centres.
He said R1bn had been allocated to Atterbury Africa and R2bn was available for investment through African Land.
Prinsloo said Atterbury Africa had contributed R2.5m and African Land R3.8m to Hyprop’s distributable earnings in the six months to December last year. He said although Hyprop had increased its investment in Africa, it would not take much to soak up its R3bn investment.
“Depending on the structure of the transaction, it [the investment] could be easily taken out in one or two significant deals on the existing shopping centre side,” he said.
Hyprop acquired 87 percent of the issued shares in African Land Investments, whose only current asset is the Manda Hill regional shopping centre in Lusaka in Zambia, for R768m in November last year.
Through Atterbury Africa, Hyprop owns the existing Accra Mall in Ghana while the West Hills Mall, also in Accra, is under construction and due for completion in October.
Prinsloo added that apart from the West Hills Mall, it was looking to do two other development projects in Ghana and had a current development project in Lusaka.
Hyprop was also looking at buying opportunities locally, Prinsloo said, but these opportunities were very scarce.
It would also focus on expansion and refurbishment opportunities with its own portfolio and improving its tenant quality and tenant mix.
“There are a number of projects we are looking at at the moment and we still see demand from some of the local national tenants that want to take more space,” he said.
The Rosebank Mall redevelopment remained on track for final completion in September, he said.
On Friday Hyprop reported a 9.5 percent growth in distribution to R2.31 a combined unit for the six months to December last year from R2.11 in the previous corresponding period.
Laurence Cohen, Hyprop’s financial director, said the growth in income from regional and super regional malls, excluding Somerset Mall, was on average 9.6 percent while net income growth across its Canal Walk, Woodlands, Clearwater and Hyde Park centres was exceptional at 11 percent.
Vacancies in the office portfolio increased to 8.2 percent from 8.1 percent but Hyprop’s office portfolio was only a small component of its total assets and the impact on the fund’s revenue stream was therefore not that significant, he said.
Hyprop combined units gained 2.45 percent to close at R75.60 on the JSE on Friday.