Canal Walk owner Hyprop reports jump in earnings amid Eastern Europe boost

Hyprop Investments, whose interests include Canal Walk, Hyde Park Corner and Rosebank Mall has reported a climb in distributable income of almost a quarter in its year to end-June, with activity picking up in its SA centres, but growing by double digits in Eastern Europe.

Distributable income rose 24% to R1.45 billion to end-June, though distributable income per share rose only 18% given increased shares related to its 2022 dividend, at a 75% payout ratio.

Valued at R12 billion on the JSE, Hyprop has a portfolio worth more than R43 billion and manages retail and office investment properties in South Africa, Eastern Europe and Sub-Saharan Africa. The group has eight centres in SA, with the country making up 60% of the group’s assets and 62% of distributable income. The SA portfolio includes super regional centre Canal Walk, large regional centres Clearwater, The Glen, Woodlands, CapeGate, Somerset Mall and Rosebank Mall, and small regional centre Hyde Park Corner.

It also owns 4 assets in Eastern Europe, two in Zagreb in Croatia, one in North Macedonia, and one in Sofia, Bulgaria. In 2023, the Eastern European portfolio had been consolidated for the entire year, compared to 3 months in 2022.

The rest of Africa portfolio comprises interests in four shopping centres in Nigeria and Ghana, held through Hyprop Mauritius, a wholly owned subsidiary, and AttAfrica, a joint venture.

The group said after markets closed on Wednesday the improved trading metrics of its portfolios demonstrate the strength and relevance of its centres in their markets. Retail vacancies maintained at very low levels of 1.2% in SA and 0.3% in Eastern Europe, with SA portfolio’s foot count up 5.2%, while Europe experienced “an impressive” 14.3%” increase.

Higher rates of inflation however drove double digit increases tenant turnover, but it added it is cautiously optimistic that the peak of inflation and interest rates will soon be reached, while growth prospects in Eastern Europe remain favourable.

The group has significantly invested in alternative energy supply solutions, mainly solar plants and diesel generators, over the last three years and the cost of running the diesel generators increased from R17 million in 2022 to R104 million in 2023.

“Although most of these costs can be on-charged to tenants, this increases their cost of occupancy and is not a sustainable long-term solution,” the group said.

“We are encouraged by the steps taken to deregulate the energy sector, promote the development of new electricity generating capacity, and the reduction in load shedding since May 2023, however, there is still a lot to do to ensure energy security for the country and stimulate economic growth.”

Hyprop’s shares were down almost 2% in morning trade on Thursday and have fallen more than 9% in the past one year.

Source: News24


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