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HYPROP INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/005284/06)
JSE share code: HYP ISIN: ZAE000190724
JSE bond issuer code: HYPI
(Approved as a REIT by the JSE)
(“Hyprop” “the Company” or “the Group”)
PRE-CLOSE OPERATIONAL UPDATE
Further to the publication of Hyprop’s interim results for the six months ended 31 December 2022 on 16 March 2023,
the Company hereby provides an operational update for the five months ended 31 May 2023 (“the period”).
The Group’s operational performance continued to improve steadily over the period. The South Africa (“SA”) portfolio’s
tenant turnover increased by 9.8%, compared to the previous corresponding period, exceeding 2019 levels. Tenant
turnover across the Group’s properties in Croatia, Bulgaria and North Macedonia rose 17.64% year-on-year in the five
months to May 2023. In Ghana, in local currency terms, tenant turnover for the four months to April was up 26.11%
year-on-year. The improved trading metrics can be attributed to the results of the repositioning strategy in SA, post
Covid-19 recovery buoyed by inflation in the Eastern Europe (“EE”) portfolio, as well as improved asset management
in the sub-Saharan Africa (“SSA”) portfolio.
SOUTH AFRICA PORTFOLIO
There have been several refurbishments, relocations and new store openings across the portfolio.
At Somerset Mall, Freedom of Movement opened a new store, RocoMamas, Spur and Toy Kingdom were relocated,
and the Exclusive Books store was upgraded. Construction of the Checkers Fresh X and the new mini-food court, to
complement the Ster-Kinekor cinemas, are in progress and planned to open in November 2023.
Yoyo Bubble Tea and Kase Artist opened new stores in Clearwater Mall, while PnP and Cinnabon refurbished their
stores. Crazy Store, Lemonade (locally produced decor and gifting store) and Capitec were relocated. The new escalators
being installed near entrance 4, linking the ground and first floor, will enhance and re-energise some of the less visited
space. Completion is anticipated in November 2023.
The vacancy rate at Rosebank Mall reduced from 4.7% in December 2022 to 2%, with the opening of five new stores
and another two to follow post year-end. Cultish (streetwear clothing brand) opened its second store in SA in June 2023,
The Bed Shop opened during the same month, and Side Step and Game4U opened in February 2023 and May 2023
respectively. Future store openings include Toys R Us and Wimpy - both anticipated to open in August 2023. Nicci
Boutique, Edgars Beauty, Vodacom, Totalsports and PnP (currently 90% complete) have been refurbished. Mr Price
Home is relocating to new bigger premises and will open in August 2023, as is Spec Savers, and Frans Tailor has already
relocated and is trading. The project to upgrade the lighting at the Bath Avenue entrance is anticipated to be completed
in July 2023, while the Uber pick-up and drop-off point located at the same entrance will be ready in August 2023. Both
projects will improve the Rosebank precinct and enhance our shoppers’ experience.
Two new stores opened at Canal Walk - Top Tailor in May and the first UNIQ store in South Africa in March. The
Carlton Hair, Old Khaki, Queenspark, Sneaker Factory and Thomas & Benno stores were refurbished.
International chicken diner, Chicking, opened at The Glen Shopping Centre in February, and PEP Home started trading
in April 2023. Absa will take occupation of its revamped, downsized premises in July 2023.
Upcoming store openings at CapeGate include Nando’s and the new Suzuki dealership which is under construction and
scheduled to open in October 2023. The dealership is located in a repurposed, previously underutilised portion of the
covered parking.
An H&M pop-up store opened at Woodlands, and Mr Price has been relocated as part of the centre’s repositioning
strategy. Council approval was received for the three new drive-thru restaurants at Woodlands and leases with Chicken
Licken and Steers have been concluded. Discussions with the third potential tenant are in the final stages. The project is
expected to be completed post year-end.
The SA portfolio key trading metrics for the period are detailed below:
Total for
Trading Metric Year Jan Feb Mar Apr May 5-month
period
2020 1 626 124 1 520 831 1 358 796 334 923 1 141 803 5 982 477
Tenant Turnover 2021 1 309 237 1 401 977 1 533 140 1 512 475 1 685 443 7 442 272
(R'000) 2022 1 670 522 1 578 403 1 736 387 1 851 948 1 821 482 8 658 742
2023 1 856 829 1 766 013 1 902 320 2 001 693 1 980 522 9 507 377
Variance % 2021 vs 2020 -19.49% -7.82% 12.83% 351.59% 47.61% 24.40%
Variance % 2022 vs 2021 27.60% 12.58% 13.26% 22.44% 8.07% 16.35%
Variance % 2023 vs 2022 11.15% 11.89% 9.56% 8.09% 8.73% 9.80%
2020 2 815 2 641 2 364 1 896 2 514 2 536
2021 2 330 2 494 2 732 2 701 2 993 2 650
Trading Density (R)
2022 2 907 2 755 3 054 3 262 3 191 3 033
2023 3 202 3 057 3 294 3 472 3 443 3 294
Variance % 2021 vs 2020 -17.24% -5.57% 15.55% 42.48% 19.05% 4.50%
Variance % 2022 vs 2021 24.76% 10.50% 11.79% 20.77% 6.61% 14.46%
Variance % 2023 vs 2022 10.16% 10.95% 7.87% 6.46% 7.89% 8.59%
2020 6 986 6 527 5 653 2 024 4 192 25 382
2021 5 424 5 256 5 751 5 248 5 810 27 489
Footcount ('000)
2022 6 219 5 534 6 084 5 990 6 024 29 851
2023 6 458 5 649 6 318 6 330 6 129 30 883
Variance % 2021 vs 2020 -22.37% -19.46% 1.74% 159.25% 38.58% 8.30%
Variance % 2022 vs 2021 14.67% 5.28% 5.79% 14.13% 3.69% 8.59%
Variance % 2023 vs 2022 3.83% 2.08% 3.84% 5.68% 1.74% 3.46%
2020 1.73% 1.81% 1.95% 2.19% 2.25% -
2021 3.14% 2.64% 2.81% 2.75% 2.55% -
Retail Vacancy (%)
2022 1.90% 1.38% 1.45% 1.63% 1.44% -
2023 1.52% 1.43% 1.47% 1.71% 1.45%
2020 278 320 321 933 223 520 120 087 142 934 1 086 793
2021 210 521 253 561 259 608 295 323 228 966 1 247 979
Collections (R'000)
2022 229 561 271 178 284 008 301 862 230 535 1 317 144
2023 233 189 285 638 322 134 286 955 259 228 1 387 144
Variance % 2021vs 2020 -24.4% -21.24% 16.15% 145.92% 60.19% 14.83%
Variance % 2022 vs 2021 9.0% 6.95% 9.40% 2.21% 0.68% 5.54%
Variance % 2023 vs 2022 1.58% 5.33% 13.42% -4.94% 12.45% 5.31%
Rent reversions for the 11 months ending 31 May 2023 were 10.1% compared to 12.8% at 31 December 2022.
Loadshedding remains an ongoing and major concern for South Africa. However, all of our centres continue to trade
during loadshedding. The portfolio has full backup generator capacity with 81 generators, other than Canal Walk (which
is largely shielded from loadshedding through its participation in the City of Cape Town’s curtailment programme)
where six prime rate generators are being commissioned.
During the period, the total cost of loadshedding was R55.3 million, of which R47.7 million (86%) was recovered.
EASTERN EUROPE PORTFOLIO
Skopje City Mall concluded a deal with H&M, who will open their second flagship store in North Macedonia at Skopje
City Mall at the end of March 2024. KRS Kids, Sport Lab, Beo Sport, JYSK (homeware store), Office Plus Peko
(footwear retailer) and Buzz (casual and sportswear) have been relocated and/or up-sized. The Body Shop opened its
first store in North Macedonia at Skopje City Mall and the newly renovated Nike flagship store opened in April 2023.
The refurbishment of DM Drogerie (pharmacy) was completed in February 2023, offering a modern shopping
experience to visitors. Burger King and Star Ocean’s renovations are complete.
New tenants at City Centre one East include Triumph (intimate wear store), A1 (mobile technology device retailer),
Salamander (an accessories store), L'Occitane and Pandora. Dormeo Home, Europa92 (Lee/Wrangler), MASS
(footwear), Deichmann (footwear) and Skechers refurbished their stores.
US Polo and Polleo Sport (sports and health store) opened their doors in City Centre one West and jewellery store
Zlatarna Dodić underwent a complete refurbishment, while KFC undertook a cosmetic upgrade.
Two new entrants to the Bulgaria market will open at The Mall in Sofia – Tedi, a German value retailer, will open their
flagship store in July 2023, and Dunk Shop, a unique trendy basketball and lifestyle concept, will commence trading at
the end of June 2023. Other new tenants include Ozone (gaming store), Skiny (intimate wear) and Pink Opium (aesthetic
centre). Sinsay (part of the Polish group LPP) successfully opened in March 2023 with their latest concept store.
Bohemia (home goods), S-Gifts, Comsed (children’s toy store) and Teodor (men’s clothing store) underwent renovations
and were rightsized. Three new kiosk leases were concluded with Bubble House (waffles and tea), Akbari Perfume and
Phone Exchange. Refurbishment of all the toilet blocks was completed at the beginning of May 2023.
The EE portfolio key trading metrics for the period are detailed below:
Total for
Trading Metric Year Jan Feb Mar Apr May 5-month
period
2020 37 071 32 881 18 520 5 558 21 149 115 179
2021 28 146 30 958 30 387 29 893 38 747 158 130
Tenant Turnover (€'000)
2022 32 532 30 121 34 205 41 205 44 585 182 648
2023 40 712 36 816 41 784 47 053 48 506 214 871
Variance % 2021 vs 2020 -24.08% -5.85% 64.08% 437.85% 83.21% 37.29%
Variance % 2022 vs 2021 15.58% -2.70% 12.56% 37.84% 15.07% 15.50%
Variance % 2023 vs 2022 25.15% 22.23% 22.16% 14.19% 8.79% 17.64%
2020 226 201 115 192 133 170
2021 232 190 185 182 236 204
Trading Density (€)
2022 194 180 205 246 266 218
2023 246 224 251 283 292 259
Variance % 2021vs 2020 2.86% -5.50% 60.64% -5.04% 77.70% 19.6%
Variance % 2022 vs 2021 -16.46% -5.44% 10.64% 35.07% 12.98% 7.2%
Variance % 2023 vs 2022 26.70% 24.35% 22.44% 14.84% 9.79% 18.74%
2020 2 432 2 261 1 203 361 1 058 7 316
2021 1 591 1 804 1 751 1 641 2 008 8 795
Footcount ('000)
2022 1 821 1 713 1 948 2 082 2 262 9 825
2023 2 279 2 010 2 177 2 271 2 444 11 181
Variance % 2021 vs 2020 -34.58% -20.22% 45.53% 354.05% 89.73% 20.21%
Variance % 2022 vs 2021 14.44% -5.02% 11.24% 26.86% 12.64% 11.72%
Variance % 2023 vs 2022 25.17% 17.36% 11.75% 9.09% 8.05% 13.80%
2020 0.20% 0.30% 0.30% 0.60% 1.30%
Vacancy (%)
2021 0.40% 1.20% 1.00% 0.50% 0.40%
2022 0.30% 0.40% 0.40% 0.40% 0.80%
2023 0.59% 0.59% 0.42% 0.79% 0.33%
2020 8 486 6 374 4 709 1 863 2 545 23 977
2021 5 380 5 941 6 216 5 320 5 996 28 853
Collections (€'000)
2022 7 287 7 589 7 534 7 040 7 134 36 584
2023 7 343 8 134 8 669 7 454 7 925 39 526
Variance % 2021 vs 2020 -36.60% -6.79% 32.00% 185.56% 135.60% 20.34%
Variance % 2022 vs 2021 35.45% 27.74% 21.20% 32.33% 18.98% 26.79%
Variance % 2023 vs 2022 0.76% 7.19% 15.07% 5.88% 11.09% 8.04%
SUB-SAHARAN AFRICA PORTFOLIO
Nigeria
Ikeja City Mall in Nigeria is fully let and continues to trade and perform well, despite the challenges of the Nigerian
economy. The centre recorded a pleasing 21% decline in arrears year-to-date.
The asset management team has embarked on a programme of improving the tenant mix – several attractive tenants,
including Hugo Boss, Calvin Klein, and Chinese brands Semir and Balabala, are on a waiting list to take up space in the
centre. Mothercare, a specialist baby store, opened in May 2023.
The recently elected government removed the fuel subsidy, which has effectively increased the price of fuel by around
150%. This will result in increased costs to tenants and consumers.
The Central Bank of Nigeria has embarked on a programme of exchange control relaxation, the details of which are not
fully confirmed. We are optimistic that this will lead to increased liquidity, investment and economic activity in Nigeria
in the long-term. However, the short-term impact has been a severe weakening of the Naira against the US Dollar.
Ghana
In March 2023, L.C. Waikiki opened a store at Accra Mall, further bolstering the centre’s tenant mix. The earlier opening
of brands such as Maestro, Clarks, Celio, Enzzo, Charles Tyrwhitt and Chocolate Sayari, provides shoppers with a more
global offering. Orca Decor has signed a one-year lease on the ex-Game space, effective from 1 August 2023.
At West Hills Mall, the latest addition to the tenant mix is Hubtel, an e-commerce and FinTech platform. This comes
after the opening of Voskos and Pacific Fashion in December 2022. The asset management team continues to explore
replacement tenant options for Game at West Hills Mall.
At Kumasi City Mall, discussions with an anchor tenant for the ex-Game space are at an advanced stage. The planned
opening is scheduled for December 2023.
The SSA portfolio key trading metrics for the four months ended 30 April 2023 are detailed below. These exclude
tenants’ trading stats for Ikeja City Mall, Nigeria unless otherwise indicated:
Trading Metric Year Jan Feb Mar Apr Total for
4-month
period
Turnover (GHC'000) 2020 44 978 40 810 45 324 24 085 155 196
2021 45 694 42 291 46 907 45 589 180 481
2022 50 239 44 783 50 002 48 879 193 903
2023 61 433 54 809 65 304 62 983 244 530
Variance % 2021 vs 2020 1.59% 3.63% 3.49% 89.29% 16.29%
Variance % 2022 vs 2021 9.95% 5.89% 6.60% 7.22% 7.44%
Variance % 2023 vs 2022 22.28% 22.39% 30.60% 28.85% 26.11%
Turnover (USD'000) 2020 7 986 7 465 8 003 4 161 27 616
2021 7 771 7 267 8 092 7 817 30 948
2022 7 964 6 445 6 622 6 175 27 205
2023 4 966 4 323 5 189 5 263 19 741
Variance % 2021 vs 2020 -2.70% -2.64% 1.11% 87.86% 12.07%
Variance % 2022 vs 2021 2.49% -11.32% -18.17% -21.01% -12.09%
Variance % 2023 vs 2022 -37.65% -32.91% -21.64% -14.77% -27.44%
Trading Density GHC 2020 1 064 956 1 390 758 1 039
2021 1 309 1 185 1 275 1 234 1 250
2022 1 135 1 063 1 205 1 170 1 143
2023 1 741 1 557 1 808 1 755 1 716
Variance % 2021 vs 2020 22.98% 23.90% -8.25% 62.75% 20.30%
Variance % 2022 vs 2021 -13.23% -10.30% -5.50% -5.19% -8.59%
Variance % 2023 vs 2022 53.28% 46.57% 50.02% 50.07% 50.16%
Trading Density USD 2020 189 175 245 131 185
2021 223 204 220 212 214
2022 180 153 160 148 160
2023 141 124 144 150 140
Variance % 2021 vs 2020 17.78% 16.40% -10.37% 61.52% 15.93%
Variance % 2022 vs 2021 -19.11% -24.88% -27.46% -30.15% -25.21%
Variance % 2023 vs 2022 -21.84% -18.92% -9.82% 1.38% -12.89%
Footcount (Ikeja incl.) ('000) 2020 2 226 1 862 1 844 1 123 7 056
2021 2 142 1 782 1 907 1 825 7 657
2022 2 134 1 783 1 838 1 851 7 606
2023 2 024 1 405 1 765 2 023 7 216
Variance % 2021 vs 2020 -3.77% -4.29% 3.40% 62.53% 8.52%
Variance % 2022 vs 2021 -0.36% 0.02% -3.62% 1.42% -0.66%
Variance % 2023 vs 2022 -5.16% -21.20% -4.00% 9.28% -5.12%
Vacancy (Ikeja incl.) (%) 2020 12.21% 12.74% 12.89% 12.84%
2021 10.97% 11.14% 11.56% 11.66%
2022 11.28% 11.04% 11.39% 10.85%
2023 23.19% 23.01% 22.46% 22.90%
Collections (Ikeja incl.) 2020 3 878 3 243 3 142 2 384 12 647
(USD'000) 2021 3 083 2 801 3 437 2 796 12 117
2022 3 535 3 330 3 262 3 968 14 095
2023 2 837 2 545 3 285 2 787 11 455
Variance % 2021 vs 2020 -20.50% -13.62% 9.38% 17.27% -4.19%
Variance % 2022 vs 2021 14.64% 18.91% -5.10% 41.91% 16.32%
Variance % 2023 vs 2022 -19.74% -23.57% 0.72% -29.75% -18.73%
Trading metrics in USD have been negatively impacted by the devaluation of the Cedi against the USD.
The increase in the vacancy rate since December 2022 is due to the termination of the Game leases in the Ghanaian
malls. Excluding the ex-Game space, the portfolio vacancy would be 7.81% instead of 22.90%. Securing replacement
tenants for Game is a key priority, with progress to date set out above.
BALANCE SHEET AND CAPITAL MANAGEMENT
Hyprop successfully raised R1 billion under its Domestic Medium Term Note Programme (R240 million for a three-
year term and R760 million for a five-year term) via a bond auction on 31 March 2023. The bond auction was 2.25 times
oversubscribed. Proceeds were used to settle maturing facilities.
With strong support from lenders, the Group has refinanced €255 million of Euro denominated facilities and certain of
its ZAR facilities which mature at the end of June 2023 and the beginning of July 2023, with excess facilities being
settled. The refinancings will be implemented when the existing facilities mature.
The Group secured USD8.5 million in Nigeria recently, following a long period of limited USD availability in the
country, which was deployed to settle Ikeja City Mall’s senior loan interest payments.
Hyprop’s liquidity remains healthy, with R1.9 billion of undrawn facilities and R2 billion of cash on hand at 31
May 2023. The LTV ratio remains at circa 37.2%, and is within Hyprop’s target range.
ENVIROMENTAL, SOCIAL AND CORPORATE GOVERNANCE
Sustainability is central to the environments we operate in, the people we work with and serve, as well as the norms,
values and policies by which we operate our business. MSCI recently upgraded Hyprop’s ESG rating to 'AA' from 'A',
recognising Hyprop’s improved corporate governance practices and green building initiatives.
Waste
During the period, the overall rate of diversion from landfill continued to increase each month as did the level of dry
waste recycling. Between August 2021 and June 2022, general waste constituted 54% of total waste and has decreased
to 21% between July 2022 and May 2023.
With our zero-waste programme well underway, greater emphasis will be placed on solutions for non-recyclables as our
waste management initiatives evolve.
Water
The current erratic water supply has necessitated that we reassess water management at our centres. The following
initiatives are complete and/or underway:
• The last phase of the 2023 project to convert the cooling towers at Hyde Park Corner will be completed by
30 June 2023.
• The design of a wastewater recycling plant at Canal Walk is at an advanced stage. The water flow measurements
at various points are being analysed and finalised.
Energy
In order to mitigate the effects of loadshedding on solar production, diesel integration with solar-PV is being
implemented at all our centres and is now standard for all new solar-PV projects.
Additional bulk diesel tanks with a seven-day capacity are being installed across our South African portfolio as a
contingency plan for prolonged power outages.
The latest solar-PV rollout at Clearwater Mall (2 817 kWp), Woodlands Boulevard (4 054 kWp) and Rosebank Mall
(186 kWp) will be completed at the end of June 2023. Feasibility studies for new solar-PV projects at The Glen Shopping
Centre (3 854 kWp) and CapeGate Shopping Centre (5 532 kWp) have been completed and implementation is expected
during FY2024. Additionally, feasibility studies for solar-PV systems at Canal Walk Shopping Centre and Somerset
Mall are underway.
IN CLOSING
Notwithstanding the difficult global economic environment and specific challenges in each of the regions in which the
Group operates, our portfolios remain well positioned with improving operational performance metrics, and are making
headway towards achieving the Group’s key priorities and strategic objectives.
In South Africa, power and water shortages, and the challenges of the tough economic conditions have been exacerbated
by additional uncertainty created by the country’s foreign policy.
Elevated interest rates globally remain a concern, negatively impacting the cost of debt across our portfolios, despite
some mitigation from our hedging policy, as well consumers’ disposable income.
Implementation of Hyprop’s strategic objectives, prudent capital allocation and risk diversification should perpetuate
the Group’s operational recovery trajectory, as evidenced by the improved trading metrics above, and allow the Group
to seek opportunities to grow the business, while delivering sustainable long term returns for stakeholders.
Hyprop will hold an in-person presentation at 08:30 on 28 June 2023 to discuss this operational update. The presentation
and recording will be available on Hyprop’s website thereafter.
Hyprop’s financial results for the year ended 30 June 2023 are scheduled to be released in September 2023.
27 June 2023
Sponsor
Java Capital
