HYPROP DISTRIBUTION GROWTH STILL ON THE RISE
Now in its thirteenth year of uninterrupted distribution growth, leading listed retail property fund, Hyprop Investments, earlier today indicated that the interim distribution for the six months to June 2006 would exceed the previous interim distribution by at least 20%. Interim earnings and headline earnings per share are expected to be between 30% and 40% higher.
Hyprop CEO Pieter Prinsloo attributes Hyprop’s distribution strength to revenue growth driven by a combination of factors. “Hyprop has maintained low vacancies at its shopping centres due to good tenant retention in light of unabated demand for retail space.” He says that Hyprop has also successfully enforced contractual escalations in rentals and strong increases on lease renewals. “At the same time strict focus on operational efficiencies has ensured that the centres’ operating costs have been kept relatively stable,” he adds.
Ongoing buoyancy in retail during the six month period saw retailers continue to record good trading results, as a result of which Hyprop recorded further increases in turnover rent.
The fund’s focus is on prime regional shopping centres including Canal Walk, Hyde Park, The Mall of Rosebank, The Glen and Southcoast Mall. Retail property accounts for 90% of its total investment property with the balance made up of select offices in Johannesburg’s northern suburbs.
Prinsloo says that the commercial portfolio is also strengthening and has contributed to Hyprop’s revenue growth. “Office space enquiries have shown a marked improvement, with vacancies in this portfolio remaining low and healthy lease renewals.”
He is confident that based on the performance of the first six months Hyprop should deliver another meaningful increase in distributions for the full year to December 2006, albeit not at the same rate of growth as for the interim period.
Hyprop’s results for the six months ended 30 June 2006 are expected to be released on or around 21 August 2006. The share closed yesterday at R28.50.