HYPROP APPOINTS NEW CEO TO TAKE EXPANSION FORWARD
Leading listed retail property fund Hyprop Investments (“Hyprop”) today announced the appointment of Mike Rodel as CEO with effect from 1 August 2009. Rodel, a former Regional General Manager for Old Mutual Property Investments, will now oversee the completion of Hyprop’s R663 million expansion programme launched in 2008. The new developments remain well on schedule for completion later this year and are set to enhance Hyprop‟s portfolio of quality shopping centres with additional retail space, an improved tenant mix and increased parking facilities.
Hyprop executives Laurence Cohen (Financial Director) and Nicole Greenstone (Group Asset Manager) jointly took over the reigns of the R9.4 billion portfolio when former CEO Pieter Prinsloo resigned earlier this year. Hyprop Chairman Michael Aitken says the group is pleased to welcome Mike Rodel to the board and believes his extensive retail property management and development experience will strongly complement the team. Rodel holds a BSc (Civil Engineering) and has more than 17 years‟ experience in the property industry. Having spent eight years at Liberty Life Properties, he joined Old Mutual Investment Group (Property Investments) as General Manager of Gateway shopping centre in Durban in 2000 before being appointed Regional General Manager of KwaZulu-Natal and Eastern Cape in 2006.
Commenting on Hyprop‟s latest developments, Financial Director Laurence Cohen says the expansion programme will entrench the relevant shopping centres‟ dominance in their respective nodes. “The upgrades and new additions at Canal Walk in the Western Cape and The Glen, south of Johannesburg, will go a long way towards increasing footcount and boosting turnover at these centres.”
In May 2009 Foschini @home Living Space, the first of six free-standing retail „pods‟, opened its doors with the remainder nearing completion and due to open between June and September this year. The „pods‟ will add 15 500m² of retail space to Canal Walk specifically for destination retailers whose offerings are ideally suited to large trading floors. This will see the centre‟s retail offering increasing to over 141 000m2 in gross lettable area (“GLA”), making it one of the largest super regional shopping centres in the country.
In addition to Foschini @home Living Space, the new stores will house retailers Bride & Co, Cape Union Mart, Golfer‟s Club, Hi-Fi Corporation, Sports Direct and Urban Living. Cohen points out that Foschini @home Living Space and Cape Union Mart are both flagship stores for the respective chains, with the latter being the largest of its kind in Africa. “Cape Union Mart will take advantage of the extensive floor space and volume to offer an interactive experience including climbing walls and simulated temperature chambers.”
The two-storey „pods‟ constructed close to Canal Walk‟s main centre are ideally positioned for greater accessibility and convenience. 1 000 new parking bays are being added to accommodate shoppers.
Cohen says: “The new stores have been designed using substantial glass cladding to maximize the clear visibility from the N1 highway.” He adds that they stand to benefit from the ongoing development in the high growth Century City precinct. A new Bus Rapid Transit (“BRT”) 2 station will open on Canal Walk‟s doorstep in May 2010 to service the strong commercial development in the area. Major office parks have been built and leading corporates are relocating to Century City. The new stores represent a R206 million investment by Hyprop with an expected initial yield of 8,9%.
The Glen‟s R278 million expansion programme is also on track to take the centre over 75 000m², making it one of the largest regional shopping centres in the area. Cohen says the expansion will significantly improve the tenant mix at The Glen, providing a comprehensive variety of retailers for a „one-stop‟ shopping experience not previously available in the south of Johannesburg. The additional 19 000m² of retail space will include new anchor tenants such as Game and Dischem, together with „super lifestyle‟ retailers Wetherlys, Hi-Fi Corporation, Foschini @Home and Incredible Connection. The new development will open on a phased basis from September to November 2009. More than 1 000 new parking bays will also be added.
Cohen says a new R500 million facility from Standard Bank, secured earlier this year at a favourable interest rate of 9.4% and fixed for five years, has ensured continued funding for the developments. He says expansion of and investment in the existing portfolio is crucial to generating continued growth in distributions to unitholders, and adds: “Hyprop is well-positioned with quality assets in high growth nodes to benefit from a likely economic turnaround in the years ahead.”
The group‟s sixth and newest centre - Stoneridge Centre in Greenstone Park, Modderfontein - opened in September 2008 adding 50 000m² of retail space to the portfolio. The R571 million lifestyle mall is anchored by a Spar Supermarket, a Fruit & Veg Food Lover‟s Market, Sportsman‟s Warehouse, Toys R Us and a Virgin Active Gym. Cohen says the centre has had a challenging start. “It is not uncommon for a new centre to take two to three years to establish itself. Stoneridge opened at the start of the economic downturn, which negatively impacted demand for retail space. Surrounding residential and commercial developments have also experienced a challenging start.”
However, he says the dynamics of the Greenstone/Modderfontein node are anticipated to improve substantially as the surrounding developments become fully tenanted. Cohen adds that approval has been obtained for the construction of a direct access link to the centre off Modderfontein Road, which will give a further boost to prospects for Stoneridge Centre.