Johannesburg - Listed retail property company Hyprop envisages growing the size of its central and eastern Europe property portfolio to between six and eight shopping malls valued at e1 billion (R17bn) over the next five years.
Hyprop last month took its first step towards expanding to emerging markets outside of Africa with the acquisition of a 60 percent interest in two shopping malls in Serbia and Montenegro.
Pieter Prinsloo, the chief executive of Hyprop, said yesterday that these newly acquired assets would by asset value account for about 6 percent of Hyprop’s total portfolio, with Africa accounting for 12 percent and South Africa the balance.
But he stressed that they wanted to grow this portfolio. “There is no real magic number but we could end up at 30 percent international exposure in our portfolio compared with 18 percent currently.”
Prinsloo said Hyprop had received a lot of proposals to acquire other shopping centres in central and eastern Europe, but there was no guarantee this would result in any deals being concluded.
He said Hyprop’s portfolio in Africa outside South Africa was reaching a level of maturity where they would look at restructuring the fund.
Hyprop’s investments in Africa are through Atterbury Africa, which it jointly owns with Attacq and Atterbury.
Prinsloo said Hyprop now had five shopping centres in Africa that were income producing, spread between Ghana, Zambia and Nigeria, with a sixth centre opening next year.
Laurence Cohen, the financial director of Hyprop, said net income from Hyprop’s African investments had increased more than 60 percent year on year, but this growth was off a low base.
Cohen said the total contribution from these African investments at R35 million out of total distributable earnings of more than R700m was about 4 percent.
Prinsloo said the idea was always to make the portfolio “a more stand-alone fund” that operated more off its own balance sheet by 2019, but were currently looking at it.
“We also have interest from investors who want to come in. Maybe by introducing more investors, we can introduce more assets. We will keep our stake, but our stake will be part of a bigger portfolio.
“But it’s early days. We are busy with that exercise and we’ll see what comes out of that,” he said.
Hyprop yesterday reported a 13.4 percent growth in dividends to 297.8c for the six months to December from 262.7c in the previous corresponding period.
Prinsloo said distributable earnings benefited from good growth from Rosebank Mall following its re-development, additional income from the new sub-Saharan African investments and exchange rate gains of R8.1m due to rand weakness against the US dollar.
Hyprop expects dividend growth of between 13 percent and 15 percent for the year to June. Prinsloo said this was an upward revision of the guidance provided in August of about 10 percent.
Shares rose 5.01 percent to close at R113.95 on the JSE.