RECORD DECEMBER TRADE DRIVES HYPROPíS RETAIL PORTFOLIO
The record number of patrons flooding Hyprop Investments Limited’s shopping centres during the 2005 festive season saw the fund’s retail portfolio continue to flourish, reinforcing Hyprop’s position as the leading retail property fund on the JSE. Flagship centre Canal Walk hosted more than 2,3 million patrons during December alone.
MD Pieter Prinsloo says that the almost 50 million patrons visiting Hyprop’s centres in 2005 reflected an 11% increase in foot count over the previous year. He points out that the growth is more commendable in light of “new developments regularly coming on stream with the potential to eclipse older malls, a factor which continually intensifies competition in the retail sector.”
He says that Hyprop’s competitive advantage remains its proactive tenant management that optimises tenant mix, encourages retailers to revitalise their brands and includes initiatives such as compulsory store refurbishments to ensure tenant longevity. He further attributes the retail portfolio’s enhanced performance to a buoyant economy boosting consumer spend and assisting Hyprop in maintaining low vacancies.
He points out that “Canal Walk’s continued success is supported by an increased number of residential units in the Century City precinct swelling the centre’s primary market”.
2004’s R90 million expansion and redevelopment of The Glen Shopping Centre to adapt to the enhanced lifestyle of target patrons, translated into excellent trading results for the year.
The November 2005 opening of the new Southcoast Mall in KwaZulu-Natal was one of the portfolio’s highlights. “December trade at Southcoast Mall exceeded forecasts, as a result of which we are planning an extension to accommodate prospective blue-chip tenants,” he says. The 28,000m² centre based in Shelly Beach is a joint development with Redefine Income Fund.
In a move to diversify the retail portfolio from conventional malls Hyprop in November 2005 announced its development of the new Greenstone Lifestyle Centre in Modderfontein. Construction will begin this year and should be complete in 2007. The lifestyle centre will be an open-air development focusing on family-oriented spaces and activities as well as shopping convenience.
Prinsloo remains upbeat about the sustainability of the retail portfolio’s performance. “Nearly 50% of the portfolio’s gross lettable area is occupied by ten ‘super retailers’ whose performance over the past three years has continued to rise exponentially. “Increasing prosperity off the back of low inflation and interest rates, a growth-oriented fiscal policy and improved employment levels through government’s capital projects should continue to drive the retail sector’s performance, notwithstanding the current high base,” he says. Looking ahead he says that Hyprop will continue its strategy of focusing on high quality
retail developments in strategic locations with strong demographics.