JSE-listed real estate investment trust (Reit) Hyprop achieved a 15% increase in total distributions to 543c a share for the 2015 financial year.
Revenue and distributable earnings from investment property increased by 11.9% and 14.5%, respectively, while net asset value (NAV) per share rose 17.1% to R89.04, owing to an increase in the portfolio valuation.
Hyprop CEO Pieter Prinsloo said proactive management of the portfolio continued to yield benchmark results.
“Ongoing strong demand for retail space in our shopping malls is reflected in our low vacancies of 1.3%. The retail portfolio comprises 95.6% of total rentable area. Office vacancies dropped significantly to 8.3% from 13.8% as a result of new lettings at the Lakefield Office Park and Canal Walk offices,” he noted.
He added that Hyprop’s focus on improving its shopping centre portfolio through reinvestment had paid off.
“The redeveloped Rosebank Mall, which reopened in October 2014, immediately began contributing to the group’s growth in distributions.”
The extension to the Woolworths store in Canal Walk, Cape Town, was complete, while the extended Woolworth store in Somerset Mall, also in Cape Town, was set for opening in October.
Ongoing tenant mix improvements further boosted Hyprop’s performance, such as Hyde Park Corner’s new Cortina Court, which hosted high-end brands such as Versace, Longchamp and Armani.
Clearwater Mall’s R37-million upgrade and extension was currently under way and would house leading global fashion brands H&M, River Island and Top Shop.
Hyprop continued to sell off noncore assets and the proceeds enabled the group to reduce net borrowings to R6.6-billion. CapeGate Lifestyle, CapeGate Value Centre and Stoneridge were sold for a combined R833-million.
Prinsloo noted that the group had continued its conservative management of debt, with a loan-to-value ratio of 22.9% and 95% of interest rates fixed at 7.1%, for an average 5.2 years.
The healthy progress of its sub-Saharan African footprint also helped drive the group’s results.
Hyprop’s current investment of R2.3-billion in sub-Saharan Africa includes Accra Mall and West Hills Mall, in Ghana, and Manda Hill, in Zambia. Together these centres contributed 21% more year-on-year to distributable earnings at R42.4-million.
The 13 400 m² Achimoto Centre, in Ghana, was on track to open in October.
Prinsloo said R5-billion had been previously approved for investment in sub-Saharan Africa, with Nigeria and Kenya considered as future expansion destinations.
Meanwhile, the power supply challenges in South Africa had seen Hyprop focus on addressing its own electricity needs and a number of energy-efficient initiatives have already been implemented.
“Our portfolio has substantial back-up power and the effect of load-shedding has not been material.”
Hyprop approved a dividend of 280.3c a share for the second half of the year - an increase of 16.3% on the dividend for 2014.
The Reit was forecasting dividend growth of about 10% for the 2016 financial year.
More capital investment had been earmarked for continuous improvements and refurbishments in the year ahead to further unlock value in Hyprop’s existing South African centres.
Hyprop would also continue to assess appropriate acquisitions or developments in other emerging markets.