Johannesburg - Listed retail property fund Hyprop is looking for shopping mall acquisition opportunities in major metropolitan cities in Africa.
Pieter Prinsloo, the chief executive of Hyprop, yesterday also confirmed that the fund would consider expanding to other emerging markets outside of Africa, but this expansion would be opportunity driven.
He confirmed they were looking at a number of potential acquisition opportunities in Africa.
“In Africa, it (acquisitions) can take a long time. If we find the right asset, we will do an acquisition,” he said.
“There are nice centres being built at the moment that are under construction in Lagos and Abuja. We will only go to the major centres,” he said.
Prinsloo said a lot of the developers in Africa had limited investment horizons.
This meant that within three or four years after the development was completed they needed to exit to turn their investment around and that was where there was an opportunity for Hyprop, he said.
Approved
Prinsloo said Hyprop’s assets in Africa currently accounted for about 8 percent of the fund’s total assets and they were willing to grow this to 20 percent.
He said Hyprop had investment of R2.3 billion in sub-Saharan Africa, but R5bn had been previously approved for investment in the region, with Nigeria and Kenya considered future expansion destinations.
Its current investments in the region include the Accra Mall and West Hills Mall, both in Ghana, and Manda Hill in Zambia, with the 13 400m² Achimoto Centre in Ghana scheduled to open next month.
Prinsloo said they were not looking to expand to at any specific emerging market region outside of Africa “at this point in time”.
“It must be logical. We’re not going to go into Russia or China. If we can find a good opportunity and we can establish a base there then we will look at it. But it is very much opportunity driven and we will not pursue it actively,” he said.
Hyprop yesterday reported a 15 percent growth in total distributions for the year to June of 543c from 472c in the previous year. Total revenue increased by 11.9 percent and distributable earnings from investment property increased by 14.5 percent.
Reinvestment
Prinsloo said Hyprop’s focus on improving its shopping centre portfolio through reinvestment had paid off and the R920 million redeveloped of the Rosebank Mall, which re-opened in October last year, immediately began contributing to the group’s growth in distributions.
Ongoing tenant mix improvements further boosted Hyprop’s performance, such as Hyde Park Corner’s new Cortina Court, while Clearwater Mall’s R37m upgrade and extension was currently underway.
Prinsloo said progress with its sub-Saharan footprint also helped drive the group’s results, with these assets increasing their contribution to distributable earnings by 21 percent year-on-year to R42.4m. Hyprop is forecasting dividend growth of about 10 percent for the year June next year.
Shares in Hyprop fell 2.42 percent yesterday to close at R121.
BUSINESS REPORT