The redevelopment of Rosebank Mall, in Johannesburg, was 50% completed, JSE-listed property group Hyprop CEO Pieter Prinsloo said on Thursday.

South Africa’s third-largest listed property fund started construction on the R932-million project in September 2012 and expected to complete the project within a year.

The basement parking and the level-one Bath Avenue entrance had been completed, with the first newly built shops set to open in the last quarter of 2013.

Final completion was scheduled for September 2014.

The Rosebank Mall redevelopment, with an increase in rentable area to over 62 000 m², had secured lease commitments for 95% of the lettable area.

The short-term dilution effect of planned vacancies at the Rosebank Mall during the six months to June had resulted in a R16-million loss on distributable earnings.

However, on completion, the project, which included a further extension to the interlinking Bath Avenue bridge, was expected to yield 7%.

Prinsloo said that Hyprop would now continue expanding and enhancing existing shopping centres, as opposed to pursuing acquisitions.

The group reported distributions growth of 7.6% to 213c for the six months to June, as distributable earnings from shopping centres, excluding Rosebank Mall, grew by 7.2%.

Strong performances from the Canal Walk shopping centre and Hyde Park shopping centre had emerge, with double-digit growth of 10.2% and 10.9% reported respectively.

Despite retail vacancies rising slightly year-on-year owing to the higher vacancy rates of value centres such as Stoneridge and Willowbridge, demand for retail at the shopping malls continued to be strong, with vacancies of less than 1%.

Within Hyprop’s office offerings, which accounted for about 5% of the group property portfolio, vacancies declined to 8.1% by June, from the 9.1% reported at the end of December.

“Notwithstanding a challenging economic environment, our centres performed well. Our focus will remain on yield-enhancing expansion and refurbishments at existing shopping centres,” Prinsloo commented.

Store enlargements and relocations at Hyde Park, which reported revenue of R83.5-million during the six months to June, had been substantially completed.

The 2 700 m² Edgars extension at Canal Walk, which generated revenue of R244.9-million in the period under review, was ongoing, with trading set to start during the second half of 2013.

Further, extensions to accommodate larger Foschini and Edgars stores at The Glen were under way, while the viability of extending the shopping centre to 90 000 m², from its current 75 000 m², were being examined.

The projects combined, excluding the proposed 15 000 m² expansion at The Glen, would cost R91-million - with Hyprop injecting R72.3-million - but would produce an average yield of 11%.

Meanwhile, Hyprop would continue to dispose of any remaining noncore assets, including its office network in Centurion and Pretoria, and was currently reviewing opportunities and evaluating the potential value that could be gleaned from the assets.

The company said it was finalising the acquisition of 100% of Somerset Mall, from Sycom, in exchange for 81.5-million Sycom units and expected the transfer to be complete within the next few months.

The R2.3-billion deal was based on an income-for-income-swap, Prinsloo pointed out, with no expected dilution in distributable earnings.

Hyprop had also received its first dividend from its first investment outside South Africa.

The property group had invested R337-million of its initial R750-million commitment. The remaining funds were expected to be injected into Africa within the next 12 to 18 months.

The group’s 37.5% stake in Atterbury Africa, which owned the 19 000 m² Accra Mall, in Ghana, and was currently developing the 26 500 m² West Hills Mall, also in Accra, had netted the group a dividend of R1.4-million for the six months to June.

Hyprop and the Atterbury group jointly controlled Atterbury Africa.

Accra Mall, with 60% to 70% of retail outlets let to South African firms, including Shoprite, was currently fully let, and with increasing demand for space within the centre, the parties were mulling future expansion options.

Prinsloo said that construction work on Ghana’s latest mall, West Hills, was progressing well and was scheduled to open in October next year.

The joint venture, which had also bought the Achimota Land, in Accra, had completed the design of a 15 000 m² shopping centre scheduled to open in 2014. Pre-letting had started, with construction scheduled to start in early 2014.

Hyprop also had 20 000 m² of land in Lusaka, Zambia, with development rights for retail and a hotel. However, no specific plan had been tabled for the land-holding.

Following the introduction in April of the Real Estate Investment Trust (Reit) legislation, Hyprop changed its year-end to June and converted to a Reit effective July 1.

Hyprop reported revenue of R1.1-billion and profit of R3.7-billion for the six months to June.