Planning for the R900-million redevelopment of The Mall of Rosebank and Rosebank Gardens is progressing, with preletting well under way, says Hyprop CEO Pieter Prinsloo.
“Most of the town planning requirements have been completed with final approvals expected this month. Subject to obtaining the required approvals, the project is anticipated to begin next year,” Prinsloo told an interim results presentation for the year ended June 30.
He added the company was excited about the extensions that will increase the retail size of the mall from 37 000 m2 to 60 000 m2.
Prinsloo stated that Hyprop would become entrenched as South Africa’s premier listed shopping centre fund when it acquired Attfund Retail, this month. The R9-billion acquisition is set to almost double Hyprop’s asset base to around R20-billion and boost market capitalisation to just under R14-billion.
“Our high-quality shopping centres ensured continued growth, with like-for-like revenue up 10.5%. Property assets increased by 3% to R11.6-billion in value.”
Hyprop will focus in the immediate term on bedding down the Attfund Retail acquisition.
“This is the largest single-purchaser property transaction in South Africa in recent history,” noted Prinsloo.
The acquisition includes shopping centres across Gauteng and the Western Cape, two of the more economically active regions in the country. The fund believes the acquisition will ensure that it gains critical mass while maintaining its specialist retail focus and quality of assets, and will also further bolster its asset management team.
Vacancies remained unchanged for the period at 3.9%, with Hyprop enjoying continued strong demand for store space in the super regional and large regional malls.
The local downturn in the hospitality industry impacted negatively on the performance of the fund’s hotels – The Grace and the Southern Sun Hyde Park – resulting in a net loss for the period and the closure of The Grace at the end of last month.
“We have been approached by various inter- ested parties for The Grace hotel premises and are optimistic about announcing a solution in this regard in due course,” said Prinsloo.
Hyprop’s enterprise development vehicle, Vunani Property Investment Fund, successfully listed on the JSE last month. The fund sold 50% of its interest for R100-million, leaving it with an 11.5% stake in the listed fund and the strategy is to exit this investment over time.
In the year ahead, Hyprop intends to conti- nue selling noncore assets in order to exclusively focus on large, prime shopping centres in key urban locations.
“Subject to market volatility and trading con- ditions remaining relatively positive for retail, we expect to see improved distribution growth over the next six months to year-end.”