Business model
Our business model has been fine-tuned to give effect to our revised business strategy.
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The board recognises
the importance of
the triple context in
which the Company
operates
- economy
- society, and
- the environment
and seeks to ensure
that operations
are conducted in a
manner that takes
account of the six
capitals:
- manufactured,
- human,
- intellectual,
- financial,
- social and
relationship, and
- natural
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MANUFACTURED CAPITAL
Interests in a portfolio of property and
investment assets valued at R48.5 billion
- Maintain the relevance of Hyprop’s
properties in line with global trends and
customer needs
- Reposition our malls
- Improve dominance
- Exit strategy for sub-Saharan Africa
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- Global pandemic or financial market crises
- Low GDP growth impacts business growth
- Slowing consumer spend aff ects retailers’ trading
densities, rent-to-sales ratios and our rental income
- Tenant failure by national / anchor tenants
- Increased cost of occupancy from rates, taxes
and utilities
- Online shopping
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HUMAN CAPITAL
Our teams throughout the Group and their
skills, knowledge and expertise
- Collaborative culture
- Staff training and development
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- Shortage of skills may result in an inability to
recruit required employees
- Increase costs of retaining key employees
- Succession planning
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INTELLECTUAL CAPITAL
Our business success is underpinned by
the intellectual capital maintained in our
human resources and systems
- Strong leadership team
- In-house asset management team and inhouse
legal expertise to manage risk
- Ongoing investment in systems and
processes
- Staff training and development
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- Digital disruption
- Technology and business processes become
outdated and inefficient
- Digitalisation
- Shortage of skills may result in an inability to
recruit required employees and skills
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FINANCIAL CAPITAL
Hyprop’s capital structure and our
established relationships with investors, banks
and other funders across the globe
- Disciplined management of debt and equity
- Recycling of capital
- Working capital management
- Total return to shareholders
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- Downgraded sovereign and Company credit
rating impacting borrowing costs
- Multi-currency and refinancing risks associated
with the Group’s funding structure and gearing
- Interest rate hedging profile
- Impact of Covid-19 on cash collections and arrears
- Refinancing risk amidst Covid-19
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SOCIAL AND RELATIONSHIP CAPITAL
Our interactions with stakeholders inform
Group strategy
- Sustainable total investment returns
- Improve existing culture
- Understand our shoppers in order to
provide meaningful experiences
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- Over supply of retail space in the market
- Increased crime at shopping centres
- Perception of unsafe shopping environment
due to Covid-19
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NATURAL CAPITAL
Our role as a good global citizen,
understanding our impact beyond our
property assets, and our responsibility to
reduce our environmental footprint
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- Introduction of carbon tax
- Failing to meet primary environmental
targets (energy, water, recycling and carbon
consumption)
- Disrupted water and electricity supply at
shopping centres
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In expanding, enhancing, diversifying and optimising our porfolio to deliver sustainable returns we take into
account our full universe of stakeholders.
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The board recognises
the importance of
the triple context in
which the Company
operates
- economy
- society, and
- the environment
and seeks to ensure
that operations
are conducted in a
manner that takes
account of the six
capitals:
- manufactured,
- human,
- intellectual,
- financial,
- social and
relationship, and
- natural
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- Provide a range of retail, entertainment and related services to residents and
workers within a mixed-use precinct
- Working with tenants to reduce the cost of occupancy and improve trading densities
- Spread quantum and value of leases expiring on an annual basis
- Embrace online retailers and provide facilities for them to distribute their products via
our malls
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TENANTS
- R212 million invested in mall upgrades
and expansions in South Africa
- 345 leases signed over 126 942m2
of GLA
- Covid-19 rent relief for tenants R455m
- Tenant retention rate of 91% (SA)
EMPLOYEES
- Employee retention rate of 95.2%
- 19 internal placements / promotions (SA)
- Percentage of black employees
increased to 64% (SA)
- Percentage of black senior management
employees increased to 9% (SA)
FUNDERS AND INVESTORS
- Retained R1.2bn of cash from
distributions to repay debt
- Reduced USD-denominated debt
by $271m
- R500m available revolving credit facilities
- Interest cover ratio 3.03 times
- Roadshows and presentations to equity
and bond investors
SUPPLIERS
- Fair business practices and tender processes
- Efficient contract management
REGULATORY BODIES
- Submission of all applicable statutory
reports
- Compliance with relevant acts and
regulations
COMMUNITIES
- 39 NPOs benefitted from the Hyprop
Foundation
- 29 NPOs benefitted from free space
in our malls to generate funds and
awareness
ENVIRONMENT
- 77% of waste in SA porfolio recycled
- 12 232 GJ direct renewable energy
consumption from solar PV
- Canal Walk 5-Star Greenstar Rating
- Retrofitting green-design principles to
existing buildings
- Installation of solar-photovoltaic plants
at Hyprop’s Gauteng malls
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- Maximising the Group’s human and intellectual capital in a collaborative and
results-orientated culture
- Retention strategy and policy includes performance incentives, remuneration
benchmarking, personal development plans, career goals and transformation targets
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- Non-tangible asset strategy
- Invest in the development of technologies in the retail, property and infrastructure
spaces that will have a direct impact on our business
- Use of technology to improve efficiencies
- Staff retention strategy and policy
- Staff training programmes
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- Disciplined management of debt and equity, recycling of capital
- RStrengthen the balance sheet by optimising capital allocation and distribution ratio
- Maintain adequate liquidity/bank facilities to refinance short-term debt
- Maintain strong relationships with lenders
- Interest rate hedging policy adopted by the board
- Focus on total return, sustainable distributable income, and cash-backed earnings /
distributions
- Clear, transparent and regular engagement with investors
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- Workshops with major tenants to address common challenges
- Shopper surveys to strengthen Hyprop’s and tenants’ operations
- Demographic studies for all malls
- Implement relevant guidelines, protocols and preventative measures
recommended by WHO and local health authorities
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- Monitoring our impact on the sustainability of the communities and environment
in which we operate
- Focus on reducing consumption of natural resources
- Voluntarily participate in global environmental benchmarking programmes
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