Property company Hyprop says it has strengthened its balance sheet since the financial year ended June 30, as a result of asset sales and shareholder reinvestments.
It currently holds R1.6-billion of cash and R900-million of unused revolving credit facilities.
The company says this strong liquidity position reflects the completion of the sales of the Atterbury Value Mart, in South Africa, and the Delta City Mall, in Belgrade, Serbia, as well as R876-million received through an 85% uptake by shareholders of the share reinvestment alternative.
As a result, Hyprop’s loan-to-value (LTV) ratio has firmed to 34%, on a like-for-like basis, from 37.2% at its financial year-end.
In a financial and operating pre-close update for the four months to October 31, the group warned that the emergence of a new variant of Covid-19 was likely to have an impact on most jurisdictions where Hyprop operates.
“We are confident that the group’s strategy and key priorities remain relevant, even in a prolonged Covid-19 environment.
“Our priorities over the next months are to complete negotiations on the Hystead liquidity event, continue strengthening the balance sheet, reposition the South African portfolio for future growth, increase the dominance of the Eastern European properties in our overall portfolio and pursue our non-tangible asset strategy,” CEO Morné Wilken notes.
Hyprop reported a 4.6% increase in visitors to its South African malls and a 6.7% increase in Eastern Europe in the four months to end-October, compared with the same period in 2020.
However, in both regions, footfall has not yet reverted to pre-Covid levels. In Eastern Europe, the various restrictions to control the fourth wave of infections have had a negative effect on operations.
In South Africa, the group plans to launch its digital mall application in some of its malls in 2022.
There has been a visible improvement in the performance of travel and entertainment tenants, as well as luggage and jewellery. Only a few smaller tenants and cinemas are still receiving assistance.
Hyprop’s retail vacancies in South Africa were 2.6% in October, having shown a steady month-on-month improvement since end-June.
In Eastern Europe, tenant vacancies remained low at 0.2%, and the seven stores vacated by Inditex were successfully re-let.
Refurbishments of Skopje City Mall and the Mall Sofia are progressing well.
As the roll-out of vaccines in Eastern Europe advances, Hyprop says it is optimistic that restrictions will be further relaxed, and footfall will recover further in the first quarter of 2022.
In the sub-Saharan Africa (excluding South Africa) portfolio, most metrics are tracking above the same period last year. In Ghana, footfall is almost back to pre-Covid levels.
Hyprop continues to pursue an exit from the sub-Saharan assets, while actively managing them to create value.
Because of the dollar liquidity crisis in Nigeria, Hyprop says it has been impossible to close out the sale of Ikeja City Mall, but progress is being made in disposing of Hyprop’s three remaining malls in Ghana.
Hyprop is pursuing a number of sustainability initiatives, including improving recycling, reducing waste, becoming more water- and energy-efficient and reducing carbon emissions in line with national targets. It has completed its waste audits and is finalising its energy audits.