Wrap Text
Pre-close operational update
HYPROP INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/005284/06)
JSE share code: HYP
ISIN: ZAE000190724
JSE bond issuer code: HYPI
(Approved as a REIT by the JSE)
("Hyprop" or "the Company" or "the Group")
PRE-CLOSE OPERATIONAL UPDATE
Hyprop delivers on its purpose – to create spaces and connect people – by owning and managing dominant
retail centres in mixed-use precincts in key economic nodes in South Africa and Eastern Europe. We do this
by ensuring the centres meet the needs of the communities they serve and by embracing relevant new
technologies.
Further to the publication of Hyprop's Annual Results for the year ended 30 June 2022 on
29 September 2022, the Company hereby provides an operational update for the four months ended 31 October
2022 ("the period").
BALANCE SHEET AND CAPITAL MANAGEMENT
On 7 November 2022, the Company announced that 84.4% of shareholders elected the dividend reinvestment
plan ("the 2022 DRIP") offered to shareholders with the distribution for the year ended 30 June 2022 ("the
2022 dividend"), equivalent to an aggregate value of R844 million. The dividend reinvestment elections were
reduced equitably for all shareholders on a pro rata basis to R500 million in aggregate, resulting in the issue
of 16 127 649 new Hyprop shares, and R500 million of cash being retained by Hyprop as new equity.
Hyprop successfully issued two bonds under its DMTN program through a public auction in November 2022,
raising R785 million (R502 million for a three-year term and R283 million for a five-year term) at attractive
margins. The bond auction was 1.4 times oversubscribed.
The Group's Rand and Euro-denominated interest costs are circa 80% hedged, providing protection against
the increase in interest rates. The average overall Rand interest rate has increased from 7.6% in June 2022 to
8.1% at 31 October 2022, and the overall Euro interest rate has increased from 2.7% in June 2022 to 3.0% at
31 October 2022.
The bank debt in Nigeria was successfully refinanced for a further two years and the team is close to
completing the refinancing of the Ghana bank debt.
The Group's liquidity remains strong, with R2.4 billion of unutilised facilities and R814 million of cash on
hand at 31 October 2022. The LTV, after payment of the 2022 dividend and implementation of the 2022 DRIP,
is 38.2%.
SOUTH AFRICA PORTFOLIO
Scape Goat Gallery, Georges Grill House and Versailles Luxury, a high-end accessory store, opened recently
in Hyde Park Corner, while Charles Greig Galleries has undergone a stylish revamp. At Rosebank Mall the
subdivision of the existing Truworths premises and relocation of Cotton On has commenced, and we
welcomed Volpes, Footgear and Republic.
During the period Huawei, Cosmic Comics and Freedom of Movement opened in Clearwater Mall. Wolf
Brothers is being revamped, with TAG Heuer becoming a standalone store within the store. A new look
Panarotti's opened in the fully revamped piazza.
The reconfiguration and subdivision of the ex-Food Lovers Market premises at Woodlands has been completed
to accommodate West Pack, Petzone and Volpes. Eagle Lighting opened in the Woodlands Value Centre.
To celebrate the South African arts, Somerset Mall collaborated with well-known artist Marco Olivier,
displaying his unique art works/pieces throughout the centre. We opened new stores for PUMA and Salomon,
and Foschini completed their full store upgrade.
RoccoMamas and Factorie are among the new stores that opened at CapeGate, and a new Suzuki showroom
is expected to open during the latter half of 2023. The bathroom upgrade at CapeGate will commence in mid-
January 2023. This will include the installation of new Propelair toilets to reduce water usage.
A number of new stores opened in Canal Walk, including the first Nike Live concept store in Africa, the first
Xaomi and SPCC (Sergeant Pepper Clothing Company) stores in the Western Cape, Hot Chefs, a fast-food
restaurant serving proudly Capetonian cuisine, and a flagship Pick n Pay clothing store, which is more than
double the size of their previous store. The conversion of the NuMetro West-Wing cinemas into a new
Adventure Park has commenced and is expected to open during the third quarter of 2023.
Total for 4-
Trading Metric Year Jul Aug Sep Oct month period
2020 1 274 647 1 373 808 1 327 257 1 470 709 5 446 421
Tenant Turnover (R'000) 2021 1 424 864 1 464 246 1 513 825 1 644 499 6 047 433
2022 1 834 411 1 693 531 1 723 701 1 818 404 7 070 047
Variance % 2021 vs 2020 11.8% 6.6% 14.1% 11.8% 11.0%
Variance % 2022 vs 2021 28.7% 15.7% 13.9% 10.6% 16.9%
2020 2 413 2 560 2 372 2 660 2 502
Trading Density (R) 2021 2 555 2 577 2 654 2 897 2 671
2022 3 225 2 967 3 013 3 161 3 091
Variance % 2021 vs 2020 5.9% 0.7% 11.9% 8.9% 6.8%
Variance % 2022 vs 2021 26.2% 15.1% 13.5% 9.1% 15.7%
2020 4 931 5 404 5 560 5 985 21 880
Foot count ('000) 2021 5 371 5 613 5 628 6 267 22 879
2022 6 320 5 829 5 910 6 434 24 493
Variance % 2021 vs 2020 8.9% 3.9% 1.2% 4.7% 4.6%
Variance % 2022 vs 2021 17.7% 3.8% 5.0% 2.7% 7.1%
2020 2.7% 3.5% 3.7% 3.3% -
Retail Vacancy (%) 2021 3.1% 3.1% 2.7% 2.6% -
2022 2.0% 1.5% 1.3% 1.3% -
2020 246 783 230 990 273 566 322 524 1 073 862
Collections (R'000) 2021 251 172 224 470 265 946 300 735 1 042 323
2022 255 298 279 779 313 384 248 591 1 097 053
Variance % 2021 vs 2020 1.8% -2.8% -2.8% -6.8% -2.9%
Variance % 2022 vs 2021 1.6% 24.6% 17.8% -17.3% 5.3%
Trading metrics for 2020 and 2021 exclude Atterbury Value Mart.
Certain prior period amounts have been updated with the most recent information received.
The SA portfolio's foot count continues to grow, increasing by 7.1% compared to the same period in 2021.
Foot count on Black Friday was 8% higher than in 2021, and tenant turnover for the period grew 16.9%.
Demand for space from retailers remains robust and many retailers are trading better than prior to Covid. Retail
vacancies remain low at 1.3% and the centres are well-positioned for the anticipated festive season trading.
EASTERN EUROPE
Following the lifting of all Covid-19 restrictions in Eastern Europe earlier this year tenant turnover, trading
density and foot count have improved significantly.
Between July and October 2022 eleven stores (4 200m²) at The Mall in Sofia have undergone complete
renovations: New Yorker, Sport Vision, Intersport, English Home, Miele, Tom Tailor, Top Shop, Zlatna
Ripka, Pizza Lab, Kenvelo and Terranova. Six new stores opened during the period to enhance the tenant mix
– Calliope, AC&Co, Jack and Jones, Cool Club, Skapto Burger and Robotime. Intersport has replaced
Massimo Dutti, and Sinsay will relocate in April next year to the former ZARA space and double the size of
their store. H&M will undergo a revamp in 2023 and incorporate H&M Home, a market entry in Bulgaria for
this concept, into the store. Phase 1 of the upgrade of the bathrooms will be completed by the end of November
2022 and phase 2 will commence in January 2023, to be completed by April 2023.
The first Kiko Milano in North Macedonia opened in Skopje City Mall and Duki Daso enlarged their footprint.
Two new kiosks, Markt & Choco House, were introduced to the recently upgraded food court, enhancing the
offering.
City Center one East's tenant mix was improved with the addition of Purex, Submarine Original and Sizeer.
Ghetaldus Optika relocated to the upper level to create an optometrist cluster on this floor.
We continue to monitor any potential impact of the Ukrainian / Russian war on the portfolio. Increased costs
of electricity, fuel and gas are driving inflation, which impacts tenant occupancy costs. Tenant performance is
being monitored on a monthly basis, and temporary rent relief has been granted to some tenants in exchange
for future rental escalations and longer lease tenure.
Total for the 4-
Trading Metric Year Jul Aug Sep Oct month period
2020 33 161 29 956 36 649 37 493 137 258
Tenant Turnover 2021 38 594 34 055 38 315 42 017 152 982
(€'000) 2022 40 190 36 866 44 794 43 990 165 840
Variance % 2021vs 2020 16.4% 13.7% 4.5% 12.1% 11.5%
Variance % 2022 vs 2021 4.1% 8.3% 16.9% 4.7% 8.4%
2020 203 183 224 228 210
Trading Density (€) 2021 234 206 229 251 230
2022 241 221 272 268 250
Variance % 2021vs 2020 15.0% 12.4% 2.3% 9.9% 9.7%
Variance % 2022 vs 2021 2.9% 7.1% 19.1% 6.7% 8.9%
2020 1 814 1 671 1 917 1 891 7 293
Foot Count ('000) 2021 2 091 1 812 1 878 2 106 7 886
2022 2 139 2 030 2 245 2 335 8 748
Variance % 2021vs 2020 15.3% 8.4% -2.0% 11.4% 8.1%
Variance % 2022 vs 2021 2.3% 12.0% 19.6% 10.9% 10.9%
2020 1.2% 0.9% 0.8% 0.7% -
Vacancy (%) 2021 0.3% 0.4% 0.3% 0.3% -
2022 0.9% 0.9% 1.4% 0.5% -
2020 7 123 6 583 6 821 6 612 27 140
Collections (€'000) 2021 6 297 6 166 6 561 6 612 25 637
2022 6 854 7 133 7 606 7 042 28 635
Variance % 2021vs 2020 -11.6% -6.3% -3.8% 0.0% -5.5%
Variance % 2022 vs 2021 8.8% 15.7% 15.9% 6.5% 11.7%
Certain prior period amounts have been updated with the most recent information received.
The portfolio vacancy rate remains low at 0.5% and is confirmation of the dominance of the centres. The
centres performed well over the Black Friday weekend, with foot count up 19.6% on the Friday and 23.1% on
the Saturday compared to the previous year.
SUB-SAHARAN AFRICA (EXCLUDING SOUTH AFRICA)
Nigeria
All stores, restaurants and cinemas at Ikeja City Mall can now trade without restrictions. Trading at the new
Nike store has exceeded expectations since its opening in August 2022. The centre is performing well and has
one vacancy of 166m² (June 2022: nil).
For the first time in almost three years, Ikeja managed to procure some US dollars in Nigeria, however, the
amount is not significant and the lack of US dollar liquidity remains a challenge.
Ghana
Turnover and trading density at the Ghanaian centres have been impacted by the 144% depreciation of the
Ghanaian Cedi against the US dollar since 1 January 2022. On a positive note, vacancy levels have reduced
from 13.4% in June 2022 to 12.7% in October 2022, as a result of focused asset management improvements.
We are closely monitoring the impact of the Cedi depreciation on rentals, collections, and occupancy rates.
Accra Mall will welcome a number of new tenants before the end of the calendar year, including Maestro,
Chocolate Sayari and Yetra E-Gaming (a world-class E-Gaming store). LC Waikiki is completing their new
store fit-out and is expected to commence trading by the end of the first quarter of 2023. Vodafone and Maydan
Home Décor have expanded into bigger stores.
At West Hills Mall, Easy Prime, with brands such as Voskos and Pacific Fashion, should commence trading
by the end of 2022. Maydan Home Décor, Motion Furniture, Unique Collections and Madagastar E-gaming
opened new stores.
At Kumasi City Mall, Kidsville and Tecno recently opened, following the earlier opening of P2Lounge,
Oregano (both restaurants), Mac Cosmetics, Gamel Clothing, and Spendstree Photos. Kent's Cup expanded
into a larger store. Astolinks and Peer Teks are expected to open by the end of the calendar year.
An exit agreement has been concluded with Game in Ghana, in terms of which a settlement fee will be paid
by Game before 31 December 2022 for the early termination of their leases. The asset management team is
making good progress in re-letting the ex-Game space.
Total for 4-
Performance measure Year Jul Aug Sep Oct month period
2020 35 152 38 310 40 351 39 761 153 574
Turnover (GHC'000) 2021 42 815 48 511 44 055 45 398 180 779
2022 49 734 52 034 55 324 57 780 214 872
Variance % 2021 vs 2020 21.8% 26.6% 9.2% 14.2% 17.7%
Variance % 2022 vs 2021 16.2% 7.3% 25.6% 27.3% 18.9%
2020 6 019 6 573 6 910 6 786 26 288
Turnover (US'000) 2021 7 170 7 864 7 955 7 382 30 371
2022 5 968 5 926 5 478 4 820 22 192
Variance % 2021 vs 2020 19.1% 19.6% 15.1% 8.8% 15.5%
Variance % 2022 vs 2021 -16.8% -24.6% -31.2% -34.7% -26.9%
2020 970 1 048 1 129 1 068 1 053
Trading Density (GHC) 2021 1 198 1 246 1 121 1 216 1 195
2022 1 112 1 170 1 297 1 376 1 236
Variance % 2021 vs 2020 23.5% 18.9% -0.8% 13.9% 13.4%
Variance % 2022 vs 2021 -7.2% -6.1% 15.7% 13.2% 3.5%
2020 166 180 193 182 180
Trading Density (USD) 2021 201 202 202 198 201
2022 133 133 128 115 128
Variance % 2021 vs 2020 20.8% 12.3% 4.6% 8.5% 11.3%
Variance % 2022 vs 2021 -33.5% -34.0% -36.5% -41.9% -36.4%
2020 1 882 1 987 1 697 1 797 7 363
Foot count (Ikeja incl.) ('000) 2021 2 059 2 142 1 945 2 169 8 315
2022 1 929 1 957 1 902 2 000 7 788
Variance % 2021 vs 2020 9.4% 7.8% 14.6% 20.7% 12.9%
Variance % 2022 vs 2021 -6.3% -8.6% -2.2% -7.8% -6.3%
2020 13.8% 13.7% 13.5% 13.2%
Vacancy (Ikeja incl.) (%) 2021 11.2% 11.1% 10.8% 10.7%
2022 10.2% 10.1% 9.4% 9.7%
2020 2 638 2 653 2 589 2 567 10 448
Collections (Ikeja incl.) ($'000) 2021 3 308 2 764 3 225 3 083 12 380
2022 3 488 3 454 3 227 2 314 12 483
Variance % 2021 vs 2020 25.4% 4.2% 24.6% 20.1% 18.5%
Variance % 2022 vs 2021 5.5% 24.9% 0.1% -24.9% 0.8%
Certain prior period amounts have been updated with the most recent information received.
Turnover for the period in local currency increased 18.9% from 2021 and collections were in line with the
prior year. Vacancies reduced from 12.3% in June 2021 to 10.1% in June 2022, and to 9.8% in October 2022.
We continue to work with Actis to find a way to implement the sale of Ikeja City Mall. Various alternatives,
including the sale of a portion of our investment, are being considered. The deteriorating Ghana economy has
resulted in the term sheet relating to the sale of the Ghana portfolio lapsing.
ESG
Sustainability is integral to our business and our initiatives focus on recycling, reducing waste, managing
assets to be more energy and water-efficient, and reducing carbon emissions in line with national targets. Our
sustainable procurement and B-BBEE policies seek to change the historical patterns of privilege and poverty.
We continue to preserve and develop our human capital resources and manage our financial resources in a
prudent and responsible manner, while effective governance integrates integrity and performance.
We intend to implement the next phase of solar PV at Woodlands Boulevard, Rosebank Mall, and Clearwater
Mall during the 2023 financial year, adding 7 254 kWp of capacity which should produce 8 919 482 kWh per
annum, and utilise the remaining roof space available for solar PV generation on our Gauteng portfolio. In
addition to the sustainability benefits, the solar projects produce attractive financial returns.
The Propelair toilets installed at Clearwater Mall, Rosebank Precinct and Hyde Park Corner resulted in water
savings of 7 700 kl in the four-month period, equating to a saving of R662 000. Propelair toilets will be
installed at Woodlands and should save 12 483 kl of water and R476 000 per annum. Given the water savings
being achieved, the roll-out of Propelair toilets will be extended across the SA portfolio.
Good progress is being made with our organic waste management initiatives and we implemented various
organic waste solutions and technologies at our centres during July and August 2022. Somerset Mall and
CapeGate upgraded their waste management facilities to Bokashi systems, an indoor "composting" system, in
August 2022. After a reassessment in October 2022, the organic waste volumes at Woodlands warranted an
upgrade to a bio bin system, an on-site capture and containment system used for organic material processing,
similar to the current systems at Hyde Park Corner and Clearwater. This was implemented in November 2022.
Further evaluation of onsite solutions will take place throughout 2023, and volume and performance will
inform best-fit solutions.
IN CLOSING
Despite the difficult economic environment, the improved trading conditions at all centres and the Group's
strong balance sheet mean we are well positioned to face the challenges of rising inflation, higher interest rates
and energy costs, and socio-political events. These factors are compounding existing weaknesses in the South
African economy, including the failure by municipalities and Eskom to deliver services, currency volatility,
and pressure on consumers and consumer spending. Risk in the current economic environment remains
elevated and fluid, requiring caution and conservatism in our approach and strategy. We continue to focus on
generating sustainable total returns for shareholders, reducing debt, and allocating capital prudently to
diversify risk.
Hyprop's interim results for the six months ended 31 December 2022 are scheduled to be released in March
2023.
Hyprop will hold a virtual presentation at 14:00 this afternoon to discuss this operational update. Please contact
Lizelle du Toit at lizelle@hyprop.co.za should you wish to join the presentation. A recording of the
presentation will be available on Hyprop's website thereafter.
5 December 2022
Sponsor
Java Capital
Date: 05-12-2022 10:38:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
