HYPROPĒS STRATEGIC DISPOSALS NET MORE THAN R90 MILLON FOR FUND
Hyprop Investments has disposed of office buildings in aggregate worth R93 million to a spread of parties, successfully furthering its core strategy of disposing of non-core commercial properties to focus on prime retail real estate.
Managing director Pieter Prinsloo says that “the disposals present the ideal opportunity to exit small commercial properties that do not form part of the fund’s core assets, at fair values”. He emphasises that Hyprop’s clearly stated strategy is to focus on sizeable property investments particularly in regional shopping centres where there is “great development potential”. A recent example is Hyprop’s R192 million investment jointly with Redefine Income Fund in the South Coast Mall on KZN’s Shelly Beach.
The largest single sale, announced yesterday, comprises 10 office buildings sold to Freestone Property Fund (formerly Arnold Property Fund) for a total of R57 million. The purchase price will be payable in a combination of R28,5 million cash and 6,7 million Freestone units issued at R4,25 a unit, subject to transaction approval from the competition authorities by month-end.
Michael Aitken, director of Freestone, says that the transaction is strategic for Freestone in line with its intention to invest primarily in the commercial and industrial property sectors going forward. “The buildings offer strong investment opportunity in fastgrowing business nodes,” he says. Prinsloo says that with Freestone units currently trading at around R4,95, the sale terms offer the units at an attractive price with the opportunity for Hyprop to unlock capital down the line.
The balance of the properties, totalling R36 million altogether, were disposed of to various separate parties. Prinsloo points out that “the disposals have significantly reduced vacancies in Hyprop’s office portfolio”.
The properties including those sold to Freestone, aggregate to 23 400m 2 of office space located in Dunkeld, Wierda Valley and Midrand. The disposals in total have no material impact on Hyprop’s earnings and Prinsloo says that the cash proceeds will be used to fund future key investment opportunities.
Hyprop’s continuously climbing unit price closed yesterday at R19,30.