Johannesburg - Hyprop, the listed retail property fund, will consider further acquisitions in eastern Europe, but does not anticipate making further acquisitions in Africa in the immediate future.
Pieter Prinsloo, the chief executive of Hyprop, said on Friday that the fund had not totally written off Africa, but its portfolio had reached a critical size. “We are not actively looking at increasing our investments in Africa at this time. The current sentiment and trading conditions are tough and in Africa you need patience and time. We would rather focus on our existing portfolio,” he said.
Prinsloo said Hyprop had a total portfolio valued at R4.2 billion in Africa and was developing a mall in Kumasi in Ghana, which should be operational by April.
Hyprop acquired the 22 000 square metre Ikeja City Mall in Lagos in Nigeria in November to add to its two existing retail assets in Ghana, the West Hills Mall and Achimoto Centre, and Manda Hill centre in Zambia.
The fund made its first acquisitions outside of Africa when it acquired a 60 percent stake in City Podgorica in Montenegro in February and an identical shareholding in Delta City Belgrade in Serbia in April for €121.65 million (R1.96bn at yesterday's rate).
Growing size
Prinsloo indicated earlier this year that Hyprop envisaged growing the size of its central and eastern Europe property portfolio to between six and eight shopping malls valued at €1bn over the next five years.
Prinsloo said on Friday that it would look at further acquisitions in eastern Europe if it saw the right opportunities and also consider developments and extensions to its existing assets in the region. “The sentiment is more positive (than Africa),” he said.
Prinsloo said they were unable to do any expansion of Delta City Belgrade because there was not any additional space, but confirmed the fund was considering a potential 12 000m² expansion of City Podgorica “if we can make the numbers work”. Initial indications were that it would cost about €25m, he said.
Prinsloo added that Hyprop had some expansion projects in its South African portfolio, including the redevelopment of the La Piazza area at Canal Walk in Cape Town and a possible further extension at the Rosebank Mall of about 5 000m², at an estimated total project cost of R167m.
Hyprop on Friday reported a 14.2 percent growth in its full dividend a share to 619.9 cents for the year to June. Prinsloo attributed this growth largely to an 8.7 percent increase in distributions from the South African portfolio, additional income from acquisitions in Nigeria, Montenegro and Serbia and the opening of Achimota Retail Centre in Ghana.
Vacancies in the South African portfolio dropped to 0.8 percent from 1.3 percent.
Post year-end, Hyprop has concluded sale agreements for Somerset Value Mart in Cape Town for R185m, as well as Glenfield Office Park in Pretoria for R180m.
Prinsloo said Hyprop still had non-core assets worth a total of about R880m that were earmarked for disposal, including the Lakefield Office Park in Centurion and Willowbridge centre in Cape Town.
He expressed confidence that the strategic approach of investing in high quality centrally located centres in emerging markets positioned Hyprop for future growth and expected dividend growth of about 10 percent for the year to June.
Shares in Hyprop dropped 1.91 percent on Friday to close at R123.
BUSINESS REPORT