JSE-listed retail centre fund Hyprop on Thursday said that its distributions increased 6.8% to 409c a unit during the year ended December, buoyed by positive rental growth and increased trading density.

Revenue during the year to December increased to R2.2-billion, up from the R1.5-billion recorded in the prior year, while profit for the twelve months under review jumped to R1-billion after reporting a loss of R84-million in 2011.

Further, on a like-for-like basis, revenue and distributable earnings were up 8.3% and 9.6% respectively, while property expenses increased by 5.9%.

The property cost-to-income ratio improved to 35.4% during 2012, compared with the 37.9% in 2011, while the overall cost-to-income ratio on a fund level improved to 35.4% during the year, compared with 37.5% the year before.

Meanwhile, vacancy levels decreased from 3% to 1.7%, as demand ticked up for retail, particularly at the larger shopping centres, commented CEO Pieter Prinsloo.

He added that some progress had also been made in reducing vacancies in the office portfolio, despite it being a far tougher commercial market.

Although occupancies in offices remained under pressure, especially in the Pretoria market, overall office vacancies had been reduced from 12.2% in the prior year, to 9.1% during 2012, with total vacancies overall decreasing to 2.5%, from 3.9%.

Meanwhile, construction work on the R920-million Rosebank Mall redevelopment – which would increase its rentable area to over 62 000 m² – was progressing well, with an expected completion date of September 2014.

In addition, further extensions to accommodate larger Edgars stores at The Glen and Canal Walk retail centres had been approved at a total cost of R91.6-million.

Prinsloo said that Hyprop would continue enhancing its portfolio through appropriate acquisitions and expanding and enhancing existing shopping centres in line with tenant demand.

“Our focus remains on investment in dominant shopping centres, both locally and across Africa, while continuing to dispose of any remaining noncore assets if the opportunity arises,” he commented.

Taking into account the short-term dilution effect of the Rosebank Mall development, Hyprop expected distribution growth of between 5% and 7% for the year ahead to December 2013.