JOHANNESBURG - Listed retail property fund Hyprop plans to possibly list UK-based Hystead, the company housing its European investments, as a standalone fund next year.
Pieter Prinsloo, chief executive of Hyprop, said on Friday that planning was under way for the possible listing of Hystead as a standalone fund.
Hyprop owns a 60% stake in Hystead.
Prinsloo said Hyprop would retain a significant interest in Hystead to position it for further portfolio growth in the future. "Our expansion into the emerging market of South-Eastern Europe has proved successful. "In the first year of inclusion, net income from the quality portfolio exceeded budget, we maintained zero vacancies and both trading density and foot count grew on average by 6%," he said.
Hyprop’s investments in South-Eastern Europe, held via Hystead, include a 60percent interest in Delta City in Belgrade, Serbia; Delta City in Podgorica, Montenegro; and Skopje City Mall in Skopje, Macedonia. Hystead in July posted Hyprop's year-end and acquired Sofia’s dominant mall in Bulgaria for 155m (R2.37bn).
“This is Hystead’s first entry into the EU and The Mall boasts 52000m² of quality retail and entertainment areas, with the opportunity to expand by a further 12000m²,” Prinsloo said. Hyprop’s share of the Euro value of the Hystead portfolio was valued at 179.9m at end-June compared to 123.7m the previous year. Hyprop owns a R36.8bn portfolio of premium quality shopping centres in South Africa, sub-Saharan Africa and south eastern Europe. Hyprop on Friday reported a 12.1% growth in distributions a share to 695.1cents in the year to June from 619.9c the previous year, despite a tough domestic economic environment. The first full-year inclusion of the European portfolio helped drive distributable earnings up to R1.7bn from R1.5bn. The company’s balance sheet further strengthened with a net asset value increasing by 5.6% to R99.78 a share and the loan to value decreasing by 6.1% to 28.1%.
Total vacancies increased to 2.4% from 1.1%. Vacancies in the retail portfolio increased to 1.9% from 0.8% and office vacancies to 7.9% from 4.5%. Prinsloo said the retail vacancy rate was still within the market average and dropped to 1.7% post year-end.
He said the retail vacancy included the former Stuttafords stores at Clearwater and Rosebank Mall, which were vacated at the end of May, cinemas at Woodlands Boulevard and the former HiFi Corporation store at Capegate Shopping Centre. But Prinsloo said the Stutta- fords store at Canal Walk has been re-let to H&M, which was scheduled to begin trading in November. He added that the increase in office vacancies related primarily to The Mall Offices in Rosebank, where Sasol vacated 8942m² during the year.
Shares in Hyprop rose 0.24% on the JSE on Friday to close at R114.40.