Hyprop expects up to 8% distribution growth in 2009
Cape Town|Johannesburg|Hyprop|Property Development|Standard Bank|R179-million Southern Sun Hotel|Building|Property Development|Retail Assets|Hyprop|Laurence Cohen|Michael Aitken|Pieter Prinsloo
© Reuse this
Property loan stock company Hyprop expects to see good growth in 2010, despite the property market “entering a period of lower distribution growth”.
The company, which reported a 14,1% growth in its total distribution for the year ended December 31, 2008, expected to achieve distribution growth of between 7% and 8% in 2009, outgoing CEO Pieter Prinsloo commented on Monday.
Prinsloo expected 2009 to be a difficult year, but remained upbeat about the prospects of the company, as it had high-quality assets, low gearing and a healthy balance sheet.
He noted that there would be a slowdown in its tenants’ turnovers, a further slowdown in consumer spending and that some of its collections could slow down in the year ahead.
However, if the market conditions remained relatively stable, the company expected to achieve a distribution growth of between 328c and 332c.
Meanwhile, Hyprop would continue to focus on bringing down its vacancy levels, which Prinsloo said would not necessarily increase.
Vacancy levels had increased to 3,3% in the year ended December 31, 2008, compared with 1,5% the year before.
Hyprop noted that this was mainly attributable to vacancies at the new Stoneridge Centre, in Johannesburg, which opened its doors in September last year, as well as vacancies at the Canal Walk offices, in Cape Town.
Nevertheless, the anchor tenants at the Stoneridge centre had done well in terms of their performance in the year, with early indications of trading looking promising.
Prinsloo said that although there was a 15% vacancy rate at the centre, a figure Hyprop would aim to reduce going forward, the long-term prospects for the centre were still positive.
The vacancy levels at its other assets were low and were expected to remain that way.
Meanwhile, Hyprop was also continuing with its R662-million expansion programme, which would be completed in 2009 and would enhance the value of the company’s retail assets.
The programme included the R206-million expansion programme at Canal Walk, and, in Johannesburg, a R278-million expansion at The Glen and the R179-million Southern Sun hotel, which Hyprop is building at the Hyde Park shopping centre.
The developments were being funded through debt, which the company had already secured, with a new R500-million loan from Standard Bank having been concluded early this year.
Once completed, these developments would increase the company’s gross lettable area by between 11% and 12%.
Prinsloo said that South African banks were still in a healthy position and that they did not see the South African listed property companies as a big credit risk.
South African listed property companies also tended to have lower levels of gearing than their European, North American and Australian counterparts, said Hyprop financial director Laurence Cohen.
Hyprop’s gearing stood at 8,9%, with borrowings at the end of 2008 amounting to R834-million.
The company said that this favourable gearing would also enable it to borrow up to R3,7-billion, which it could use if any acquisition opportunities came up.
However, Prinsloo noted that there were currently no assets attracting its attention, with the properties it would consider buying not for sale.
Meanwhile, Hyprop was still looking for a new CEO, following the resignation of Prinsloo to pursue other property development opportunities.
Chairperson Michael Aitken noted that it was in the process of looking for a successor for Prinsloo, but said that the company wanted to ensure that it hired the correct candidate.
In the meantime, Hyprop had competent and experienced teams at all levels to ensure that the day-to-day running of the company was conducted as usual.
Edited by: Mariaan Webb
© Reuse this
Comment Guidelines (150 word limit)
Other Property Developments News
Redefine is building Webber Wentzel Attorney's new headquarters at its 90 Rivonia Road property in Sandton
JSE-listed real estate investment trust Redefine has concluded an agreement to acquire Leaf Property Fund, which has a portfolio of high-quality commercial property assets in prime locations across South Africa valued at about R3.7-billion. Redefine noted in a...
Web-based property trading portal Quoin Online has been granted an exclusive mandate to dispose of five hotel properties owned by real estate investment trust (Reit) Hospitality Property Fund (HPF), either individually or as a collective purchase. The 87-room Protea...
Atterbury Property has confirmed it will develop the new R1.5-billion head office of professional services firm PwC at Waterfall City, in Midrand – the first high-rise building in the precinct. This followed the signing of a lease agreement between PwC and Attacq on...
SAA acting CEO Nico Bezuidenhout, Finance Minister Nhlanhla Nene and SAA chairperson Dudu Myeni
Finance Minister Nhlanhla Nene has assured that loss-making national carrier South African Airlines (SAA) will not receive another bailout from government, noting that the most recent R6.4-billion government guarantee had only been provided in support of an intensive...
South Africa's cumulative trade deficit was R95.3-billion in 2014, the South African Revenue Service (Sars) said on Friday. In 2013, it was R71.4-billion, Sars said in a statement.
Certain regulatory approvals remain outstanding in Telkom’s proposed R2.67-billion takeover of JSE-listed Business Connexion (BCX), the parties said in an update to shareholders on Friday. BCX noted in the statement that the Competition Authority of Botswana had...
Recent Research Reports
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
This Week's Magazine
The international Square Kilometre Array (SKA) radio telescope – which is to be jointly hosted by South Africa and Australia with, later, outstations in other countries – may not yet exist, but international scientific working groups are already deciding what...
A free Web-based solar power plant capacity-planning tool offers project planners and developers, as well as governments, a means to assess the solar energy potential of thin-film solar PV power over an area of land. The tool was developed by thin-film solar...
As yet, no specific methodology, timeline or costs have been finalised to remedy the water ingress, excessive to contractual specifications, into the Gautrain tunnel between emergency shaft two (E2) and Park Station, says Bombela Concession Company technical and...
The group highlighted that executive strategic interventions and other group-wide business improvement imperatives were progressing favourably
The “seriously disruptive” electricity outages in South Africa have cost packaging group Astrapak more than R2-million in “irrecoverable downtime costs”, the company said on Monday, adding that the power cuts were negating some of the benefit of energy saving...
Bakkies and more affordable cars dominated South Africa’s new vehicle market in 2014. Unaudited data from the Department of Trade and Industry (DTI) shows that South Africa’s most popular vehicle in 2014 was the Toyota Hilux, selling 37 562 units.