ENLARGED HYPROP CONTINUES SUSTAINABLE DISTRIBUTION GROWTH
Premier listed shopping centre fundHyprop boosted total distribution by 7,3% to 383 cents for the year ended 31 December 2011 with distribution growth for the second half of the year up 10,4%. The Attfund Retail acquisition, effective 1 September 2011, saw the portfolio increase by 76%in total assets to R20,2 billion with market capitalisation up 37% to R12,9 billion.
Hyprop CEO Pieter Prinsloo explains that “distribution growth was underpinned by the defensive quality of the shopping centres in the portfolio achieving like-for-like growth in revenue and distributable earnings of 8% and 7,4%, respectively”. Star performers were Western Cape super regional centre Canal Walk with distributable earnings up 9% and southern Johannesburg large regional centre The Glen with 10% growth. “The 3,7 cents per unit once-off benefit following the deferred payment in respect of the 15 million Attfund Retail consideration units also positively impacted distributable earnings.”
Vacancy levels continued to be low with total vacancies across the portfolio at 4,1% at year-end. Vacancies on the office portfolio increased to 10%, which is primarily attributable to the three Pretoria based office parks,.Shopping centres benefited from the positive trading conditions in the second half of the year, reflecting vacancies of only 3,6%.
Hyprop’s main development focus remains the refurbishment and extension of The Mall of Rosebank onto the RosebankGardens site. “During the year Hyprop acquired the remaining 30% undivided share in the Rosebank Gardens site and demolition of existing structures in preparation for construction has already commenced,” says Prinsloo. Construction on The Mall of Rosebank will start as soon as the outstanding town planning and lease offer approvals are received. Further extensions to Canal Walk to meet rising tenant demand and the refurbishment of Willowbridge South are also planned to begin during 2012.
Subsequent to the Attfund Retail acquisition, gearing levels increased to 26,2% from 12,6% with net borrowings at year-end totalling R5,2 billion. Hyprop’s weighted average interest rate is at 8,3% with 70% fixed against short-term fluctuations.
“In line with our strategy to dispose of non-core assets, The Grace was sold for R85 million in November 2011,” says Prinsloo. Following Fountainhead Property’s exercise of their pre-emptive right, Attfund Retail disposed of its 25% interest in Centurion Mall in September 2011 for R751,5 million.
Prinsloo concludes that Hyprop will continue to focus on the disposal of non-core assets, expanding and enhancing existing shopping centres and continuously improving operating efficiencies. “Underpinned by our strategy to invest in high quality, sizable shopping centres, we will consider suitable opportunities elsewhere which may also include investments in the rest of Africa.” Hyprop expects distribution growth of between 4% and 6% for 2012.
Combined units in Hyprop closed yesterday at R56.00
Source: Podcast of Annual Results Presentation 2012