10.1 Loans receivable                    
        Foreign
currency
2018
’000		   Foreign
currency
2017
’000		   2018
R000		   2017
R000		  
10.1  USD loan – AttAfrica  Net     USD173 350     USD187 372     2 375 009     2 444 203    
   The loan represents shareholder loan funding to AttAfrica, and is repayable in June 2020. The loan is unsecured and bears interest at an initial rate of 8%, escalating at 4% per annum. Hyprop Mauritius has a preferential right to receive interest on the loan to AttAfrica and has a 37,5% equity interest in AttAfrica.  Gross     USD184 757     USD189 317     2 531 287     2 469 580    
Impairment     (USD11 407)    (USD1 945)    (156 278)    (25 377)   
                             
10.2  USD loan – Manda Hill Mauritius  Net     USD39 685     USD42 279     543 712     551 515    
   The loan is unsecured, and bears interest at a variable rate which equates to Hyprop Mauritius' 50% share of distributable income from Manda Hill Mauritius. The loan is not repayable in the next 12 months.  Gross     USD42 279     USD42 279     579 252     551 515    
Impairment     (USD2 594)          (35 540)         
                             
10.3  EUR loan – Vondelvlag Holding  Gross     EUR1 020     EUR1 020     16 323     15 199    
   The EUR1,04 million loan is unsecured, bears interest at 3,15%, payable quarterly, and is repayable in April 2021.                               
10.4  EUR loan – Vondelvlag Stichting  Gross     EUR150     EUR150     2 400     2 235    
   The EUR150 000 loan facility, of which EUR144 894 has been drawn down, is unsecured, bears interest at 3,15%, payable quarterly, and is repayable in April 2021.                               
10.5  EUR loan – Hystead Limited  Gross     EUR2 544           40 716          
   The EUR2,5 million loan facility is unsecured and bears no interest. It is short term and was converted to equity after year-end.                               
                        2 978 160     3 013 152    
   Reconciliation to the statement of financial position                               
   Non-current loans receivable from joint ventures                    2 918 721     2 995 718    
   Non-current loans receivable                    18 723     17 434    
   Current loans receivable                    40 716          
   Total                    2 978 160     3 013 152    
 

The table below reconciles the movement in the above balances during the year.

2018 AttAfrica
USD loan
R000		   Manda Hill
Mauritius
USD loan
R000		   Vondelvlag
Holding
EUR loan
R000		   Vondelvlag
Stichting
EUR loan
R000		   Hystead
Limited
EUR loan
R000		   Total
R000		  
Balance at beginning of the year  2 444 203     551 515     15 199     2 235           3 013 152    
Advances during the year  59 061                       40 716     99 777    
Repayment during the year  (157 934)                            (157 934)   
Interest charged during the year  221 568     19 689     497     73           241 827    
Interest received  (180 129)    (16 903)    (794)    (117)          (197 943)   
Net movement in interest received in advance          (2 786)                        (2 786)   
Foreign currency translation  119 141     27 737     1 422     209           148 509    
Impairment of loan (refer to note (a) below)    (130 901)      (35 540)                        (166 441)   
Balance at end of the year  2 375 009     543 712     16 324     2 400     40 716     2 978 161    
2017                                     
Balance at beginning of the year  2 633 939     624 618     12 844     1 889           3 273 290    
Advances during the year  130 827           3 864     568           135 259    
Repayment during the year  (40 379)                            (40 379)   
Interest charged during the year  202 717     31 255     597     74           234 643    
Repayment during the year                                     
Interest received  (143 105)    (25 981)    (712)    (60)          (169 858)   
Net movement in interest received in advance          (5 275)                        (5 275)   
Foreign currency translation  (314 419)    (73 102)    (1 394)    (236)          (389 151)   
Impairment of loan (refer note (a) below)    (25 377)                              (25 377)   
Balance at end of the year  2 444 203     551 515     15 199     2 235           3 013 152    

(a) Impairments on loans receivable
 

Manda Hill Mauritius and certain of the properties in the AttAfrica portfolio have been negatively affected by the economic conditions of recent years and are producing lower investment returns than what was originally anticipated. The income received from those properties over the next few years is likely to be lower than previously modelled. The shareholder loans to AttAfrica and Manda Hill Mauritius, which reflect Hyprop’s share of the value of the underlying property investments at group level, have therefore been impaired.

Key estimates and judgements made in determining the impairments were as follows:

In considering the need for an impairment of the loans to AttAfrica and Manda Hill account was taken of:

  • the long-term nature of the underlying investments,
  • the remaining period of the loan (two years),
  • the probability that the loans would be restructured and extended in 2020 (with respect to AttAfrica only as Manda Hill has no set maturity date),
  • that the negative net asset value included deferred tax liabilities on the revaluation of investment properties that the company believes would not realise on the sale of shares in the SPVs, and
  • that Kumasi (Ghana) recently opened in April 2017 and future growth is expected.

The final impairment level was based on the view that the basis of valuation was conservative given that an uplift in net asset value was expected as certain of the newer properties bedded down and their trading improved.