P. ADDITIONAL INFORMATION (EXCLUDED FROM THE AUDITED FINANCIAL STATEMENTS)
P1 EARNINGS RECONCILIATIONS
P1.1

Reconciliation of net income before fair value adjustments to distributable earnings

  GROUP  
  30 June 2019 
R000 		 30 June 2018 
R000 		  
Net income before fair value adjustments  1 797 771  1 955 219    
Adjustments to calculate distributable income  104 897  (50 705)   
   Straight-line rental income accrual  87 887  3 847    
   Non-controlling interest  30 959  2 600    
   Taxation paid – Hyprop Mauritius  (427) (4 381)   
   Net interest adjustments  134  (47 279)   
   Other fair value adjustments – Edcon  (12 705) –    
   Capital items for distribution purposes  (951) (5 492)   
Distributable earnings  1 902 668  1 904 514    

* Net effect of converting IFRS earnings to distributable earnings
P1.2  Reconciliation of cash generated from operations to distributable earnings          
   Cash generated from operations  2 149 932  2 133 136    
   Adjusted for:  (247 265) (228 622)   
      (Decrease)/increase in receivables  49 433  47 725    
      Decrease/(increase) in payables  6 838  (49 281)   
      Bad debt provision and related balances  (47 052) (31 089)   
      Depreciation  (42 209) (38 149)   
      Share-based payment expense (net of forfeit credits) (2 496) (10 877)   
      Interest received  156 043  312 550    
      Interest paid  (617 198) (594 823)   
      Dividend received  221 190  182 778    
      Other non-cash items  (406) (1 424)   
      Non-controlling interest  30 959  2 600    
      Taxation expense – Mauritius  (427) (4 381)   
      Sub-Saharan Africa  134  (47 279)   
      Other impairments – Edcon     –  –    
      Capital items for distribution purposes  (951) (5 492)   
      Capital items – other  (1 120) 8 520    
   Distributable earnings  1 902 668  1 904 514    
P2 NET ASSET VALUES
 
NAV Net Asset Value (NAV) per share is calculated by dividing equity and reserves attributable to Hyprop shareholders (as reflected on the statement of financial position) by the number of ordinary shares in issue at the end of the year less treasury shares.
TNAV Tangible Net Asset Value (TNAV) per share is calculated by dividing tangible net asset value (as calculated below) by the number of ordinary shares in issue at the end of the year less treasury shares.

The effect of outstanding/unvested shares awarded to employees under the share scheme is not material.
P2.1

Calculation

The following table reflects the net asset and share data used in the NAV and TNAV per share calculations:

  GROUP     COMPANY  
  30 June 2019  30 June 2018      30 June 2019  30 June 2018   
Equity and reserves attributable to Hyprop shareholders (R000)  24 452 006  26 304 917       24 540 621  26 184 148   
Adjusted for:              
Deferred taxation 87 561   178 002      87 561  85 832   
Tangible Net Asset Value (R000) 24 539 567  26 330 364      24 628 182  26 269 980   
Number of ordinary shares in issue 255 894 516  255 894 516      255 894 516  255 894 516   
Treasury shares (611 519) (446 260)     –  –   
Net number of ordinary shares in issue 255 282 997  255 448 256      255 894 516  255 894 516   
NAV per share (Rand) 95,78  102,98      95,90  102,32   
TNAV per share (Rand) 96,13  103,08      96,24  102,66   
P3 FIVE-YEAR REVIEW
 
  COMPANY  
  30 June 2019 
R000 		 30 June 2018 
R000 		 30 June 2017 
R000 		 30 June 2016 
R000 		 30 June 2015 
R000 		  
Revenue  3 217 848  3 113 713  3 167 649  3 078 221  2 703 034    
   Rental income and other income  2 330 177  2 244 650  3 128 062  2 976 420  2 642 949    
   Straight-line rental income accrual  (87 887) (3 847) 39 587  101 801  60 085    
   Recoveries  975 558  872 910  –  –  –    
Property expenses  (1 179 054) (1 049 892) (1 073 877) (993 861) (887 918)   
Net property income  2 038 794  2 063 821  2 093 772  2 084 360  1 815 116    
Other operating expenses  (41 600) (55 778) (78 232) (76 593) (64 611)   
Operating income  1 997 194  2 008 043  2 015 540  2 007 767  1 750 505    
Net interest  (461 155) (282 273) (336 502) (366 176) (351 647)   
   Interest income  156 043  312 550  294 177  323 759  157 344    
   Interest expense  (617 198) (594 823) (630 679) (689 935) (508 991)   
Other income  40 542  46 671  36 931  –  –    
Dividends received  221 190  182 778  146 350  –  –    
Net operating income  1 797 771  1 955 220  1 862 319  1 641 591  1 398 858    
Investment property                   
Change in fair value  (401 395) 779 036  973 270  1 227 151  2 426 584    
   Investment property  (337 237) 650 206  1 142 199  1 280 333  2 407 028    
   Other investments  (12 705) –  –  –  –    
   Derecognition of financial guarantee  185 686  11 984  –  –  –    
   Loan receivable  (105 809) –  –  –  –    
   Investment in joint venture – South-Eastern Europe  (85 228) 87 761  (163 855) –  –    
   Derivative instruments  (46 102) 29 085  (5 074) (53 182) 19 556    
Profit/(loss) on disposal  2 825  2 697  (526) –  (5 768)   
   Investment property  2 825  2 697  2 031  –  24 243    
   Subsidiary  –  –  (2 557) –  (30 011)   
Impairment of loans receivable  (1 350 727) (166 441) (25 377) –  –    
Other impairments  (29 964) (10 102) 10 102  (10 102) –    
Impairment of goodwill/Investment in subsidiary  –  –  (18 134) –  (4 280)   
Net income before equity-accounted investments  18 511  2 560 410  2 801 654  2 858 640  3 815 394    
Share of loss from joint ventures  –  –  (50 380) (41 007) (17 447)   
Share of income from associate  –  –  –  457  652    
Profit before taxation  18 511  2 560 410  2 751 274  2 818 090  3 798 599    
Taxation  93 028  (39 486) (4 340) (50 930) (19 023)   
   Normal taxation  (427) (4 381) (2 714) (7 371) (12 386)   
   Deferred taxation  93 455  (35 105) (1 626) (43 559) (6 637)   
             
Profit for the year  111 538  2 520 924  2 746 934  2 767 160  3 779 576    
Total profit for the year attributable to shareholders of the company  164 922  2 529 467  2 767 652  2 750 847  3 779 576    
Investment property at fair value(1)  28 636 718  30 849 201  29 825 333  28 822 197  25 000 630    
Distribution per share (cents) 745  757  695  620  543    

(1) Excludes investment property held-for-sale.
P4 SA REIT DETAILED PROPERTY DISCLOSURES
 

While section 13 of the JSE Listings Requirements prescribes certain disclosures applicable to property counters. SA REIT recommends that its members disclose the following additional information to provide users with more granular detail of the underlying properties as envisaged by the original REIT legislation, namely, to give investors the opportunity to fully understand the underlying properties that they invest in through the purchase and sale of a REIT’s shares.

GROUP Acquisition
date 		Completion/
major
development
date 		Land
area 		Occupied
GLA 		Vacant
GLA 		Total
GLA 		SA REIT
average
annualised
property
yield
% 		Average
lease
length 		Rental
escalation
% 		   
30 June 2019                      
R000                      
GEOGRAPHICAL PROFILE                      
South Africa     1 422 335 696 885 9 741 706 626 7,5 4,2 7,7    
   Gauteng     723 175 406 583 8 472 415 054 7,6 4,3 7,4    
   Western Cape     699 160 290 303 1 269 291 572 7,2 3,8 8,1    
Sub-Saharan Africa     51 360 21 658 565 22 223 8,5 3,4 3,7    
SECTORAL PROFILES                      
Retail     1 473 695 714 479 9 903 724 381 7,4 4,1 7,3    
Shopping centres     1 355 139 666 232 9 500 675 732 7,3 4,0 7,2    
   Super regional     233 849 157 468 1 269 158 737 6,9 4,0 8,6    
      Canal Walk 17 Oct 03 2018 233 849 157 468 1 269 158 737 6,9 4,0 8,6    
   Large regional     1 027 479 451 578 4 458 456 035 7,3 4,1 7,5    
      Clearwater Mall 1 Sep 11   194 545 86 817 241 87 059 7,2 4,6 8,0    
      The Glen 27 Dec 01 2018 98 689 77 235 3 196 80 431 7,9 4,7 7,2    
      Woodlands 1 Sep 11   215 684 71 566 61 71 626 7,0 4,5 7,4    
      CapeGate 1 Sep 11   242 438 63 832 – 63 832 7,4 4,1 8,0    
      Somerset Mall 1 Oct 13   222 873 69 003 – 69 003 7,2 3,4 7,8    
      Rosebank Mall 25 Apr 03 2018 53 250 83 125 960 84 085 6,8 3,7 6,8    
   Regional     93 811 57 186 3 773 60 960 7,7 3,7 5,5    
      Hyde Park Corner 8 Sep 98   42 451 35 528 3 209 38 737 7,0 4,0 7,3    
      Ikeja City Mall 17 Nov 15   51 360 21 658 565 22 223 8,5 3,4 3,7    
Value centres (Atterbury Value Mart) 1 Sep 11   118 556 48 247 403 48 649 8,5 4,5 7,7    
Offices (standalone offices only/Cradock) 1 Jun 09   – 4 065 403 4 468 8,8 4,2 7,8    
Total     1 473 695 718 544 10 306 728 849 7,6 4,1 7,3    

(1) All properties listed above are externally valued as at 30 June 2019.
(2) The group has 10 retail properties and one standalone office (2018: 10 retail, two office).
(3) All properties are 100% owned except Canal Walk (80%), The Glen (75.16%) and Ikeja City Mall (75%).

GROUP Acquisition
date 		Completion/
major
development
date 		Land
area 		Occupied
GLA 		Vacant
GLA 		Total
GLA 		SA REIT
average
annualised
property
yield
% 		Average
lease
length 		Rental
escalation
% 		   
30 June 2018                      
R000                      
GEOGRAPHICAL PROFILE                      
South Africa     1 422 335 696 673 9 741 706 414 7,4 4,3 8,0    
   Gauteng     723 175 406 413 8 472 414 885 7,5 4,4 8,0    
   Western Cape     699 160 290 260 1 269 291 529 7,1 4,0 8,1    
Sub -Saharan Africa     51 360 – – – 8,4 3,4 3,8    
SECTORAL PROFILES                      
Retail     1 473 695 692 608 9 338 701 946 7,4 4,1 7,6    
Shopping centres     1 355 139 644 368 8 935 653 304 7,2 4,1 7,5    
   Super regional     233 849 157 428 1 269 158 697 6,8 4,1 8,1    
      Canal Walk 17 Oct 03 2018 233 849 157 428 1 269 158 697 6,8 4,1 8,1    
   Large regional     1 027 479 451 434 4 458 455 891 7,2 4,2 7,9    
      Clearwater Mall 1 Sep 11   194 545 86 786 241 87 028 6,9 4,6 8,2    
      The Glen 27 Dec 01 2018 98 689 77 127 3 196 80 323 7,6 4,6 9,0    
      Woodlands 1 Sep 11   215 684 71 569 61 71 629 7,1 4,6 7,4    
      CapeGate 1 Sep 11   242 438 63 831 – 63 831 7,4 3,9 7,7    
      Somerset Mall 1 Oct 13   222 873 69 001 – 69 001 7,2 3,9 8,3    
      Rosebank Mall 25 Apr 03 2018 53 250 83 120 960 84 080 6,9 3,9 7,3    
   Regional     93 811 35 507 3 209 38 716 7,6 3,7 5,9    
      Hyde Park Corner 8 Sep 98   42 451 35 507 3 209 38 716 6,8 3,9 8,0    
      Ikeja City Mall 17 Nov 15   51 360 – – – 8,4 3,4 3,8    
Value centres (Atterbury Value Mart) 1 Sep 11   118 556 48 240 403 48 642 8,5 4,5 8,0    
Offices (standalone offices only/Cradock) 1 Jun 09   – 4 065 403 4 468 8,4 4,5 7,9    
Total     1 473 695 696 673 9 741 706 414 7,5 4,2 7,6    

(1) All properties listed above are externally valued as at 30 June 2019.
(2) The group has 10 retail properties and one standalone office (2018: 10 retail, two office).
(3) All properties are 100% owned except Canal Walk (80%), The Glen (75.16%) and Ikeja City Mall (75%).
P4.1

Top 10 tenants by GLA

South Africa     GLA M²   % OF SEGMENT GLA  
Rank   Tenant Prior year ranking   30 June 2019 30 June 2018   30 June 2019 30 June 2018  
1   Edcon Group 1   63 013 68 136   9,5 10,3  
2   Woolworths 2   53 199 53 199   8,0 8,0  
3   Mass Mart Group 3   49 718 50 841   7,5 7,7  
4   Pick n Pay LTD 4   49 454 48 970   7,5 7,4  
5   Foschini Group 5   35 722 34 208   5,4 5,2  
6   Mr Price Group 6   28 946 29 247   4,4 4,4  
7   Pepkor Holdings 7   22 427 22 059   3,4 3,3  
8   Nu Metro 10   17 753 16 915   2,7 2,5  
9   Truworths LTD 8   17 721 17 567   2,7 2,6  
10   Shoprite Holdings 9   17 046 17 046   2,6 2,6  
P4.2

Top 10 tenants by revenue

South Africa     REVENUE R000   % OF SEGMENT REVENUE  
Rank   Tenant Prior year ranking   30 June 2019 30 June 2018   30 June 2019 30 June 2018  
1   Edcon Group 1   163 785 169 854   24,7 25,6  
2   Foschini Group 2   157 916 145 348   23,8 21,9  
3   Mr Price Group 3   92 974 87 674   14,0 13,2  
4   Mass Mart Group 4   87 192 85 256   13,2 12,8  
5   Pepkor Holdings 6   73 215 65 971   11,0 9,9  
6   Truworths LTD 5   72 611 68 247   11,0 10,3  
7   Woolworths 7   66 220 64 865   10,0 9,8  
8   Pick n Pay LTD 8   59 393 55 689   9,0 8,4  
9   Nu Metro 9   23 835 21 932   3,6 3,3  
10   Shoprite Holdings 10   19 687 18 717   3,0 2,8  
P4.3

Top 10 tenants by GLA

SUB-SAHARAN AFRICA (IKEJA CITY MALL)     GLA M²   % OF SEGMENT GLA  
Rank   Tenant Prior year ranking   30 June 2019 30 June 2018   30 June 2019 30 June 2018  
1   Shoprite 1   5 002 5 002   22,5 22,5  
2   Silverbird Cinemas 2   1 611 1 611   7,3 7,3  
3   Smartmark     740 –   3,3 –  
4   Mr Price 4   685 685   3,1 3,1  
5   Rhapsodys 5   558 558   2,5 2,5  
6   Redtag 6   517 518   2,3 2,3  
7   Miniso 7   509 509   2,3 2,3  
8   Cash & Carry 8   505 505   2,3 2,3  
9   Gourmet Foods     224 –   1,0 –  
10   Food Concept     214 –   1,0 –  
P4.4

Top 10 tenants by revenue

SUB-SAHARAN AFRICA (IKEJA CITY MALL)     REVENUE R000     % OF SEGMENT REVENUE  
Rank   Tenant Prior year ranking   30 June 2019 30 June 2018     30 June 2019 30 June 2018  
1   Shoprite 1   22 805 20 105     13,9 11,47  
2   Smartmark     11 091 –     6,8 –  
3   Mr Price 3   4 845 5 234     3,0 2,98  
4   Silverbird Cinemas 5   4 027 4 350     2,5 2,48  
5   Rhapsodys 4   3 673 5 229     2,2 2,98  
6   Cash & Carry 6   3 358 4 085     2,0 2,33  
7   Miniso 8   3 263 3 804     2,0 2,17  
8   Food Concept     2 947 –     1,8 –  
9   Gourmet Foods     2 767 –     1,7 –  
10   Redtag     2 750 –     1,7 –  
P5 FINANCIAL INFORMATION ON HYSTEAD
 

Financial position

(Extracted from management accounts and included for information purposes only.)

  STATEMENT OF FINANCIAL POSITION  
  30 June 2019
R000		 30 June 2018
R000		  
Non-current assets 13 013 799 12 703 739  
Investment property 12 951 540 12 676 758  
Other non-current assets 62 259 26 981  
Current assets 556 203 512 699  
Receivables and other current assets 89 659 106 232  
Cash and cash equivalents 466 545 406 466  
Total assets 13 570 002 13 216 438  
Non-current liabilities 13 015 235 8 926 768  
Borrowings – in country 5 881 478 2 873 344  
Borrowings – equity 6 392 771 5 550 277  
Other non-current liabilities 740 985 503 146  
Current liabilities 271 795 4 082 283  
Borrowings – in country 14 787 2 943 557  
Borrowings – equity – 800 070  
Other current liabilities 257 008 338 656  
Total liabilities 13 287 031 13 009 051  
Net assets 282 971 207 387  

Converted to Rand at year-end spot rate R16.11/EUR for 2019 (2018: R16.00).

(Extracted from management accounts and included for information purposes only.)

  OPERATING/DISTRIBUTABLE INCOME  
Year ended 30 June 2019
R000		 2018
R000		  
Total revenue 1 434 847 826 177  
Operating profit 916 062 513 901  
Finance costs (373 067) (169 252)  
Profit/(loss) from derivatives (62 348) –  
Net income before taxation 480 646 344 649  
Taxation (76 906) (41 048)  
Net income after taxation 405 740 303 601  
Dividends declared 349 676 301 804  
Dividend included in Hyprop’s income 221 190 180 525  

Converted to Rand at year-end spot rate R16.04/EUR for 2019 (2018: R15.32).