Hyprops business model

Property investment excellence

Vision

Hyprop aims to maintain its position as a leading listed REIT in Africa, offering access to income and capital growth through a specialist portfolio of premium, high-quality shopping centres in a transparent, sustainable investment vehicle

Mission

	To be a world-class REIT that adheres to global best practice
	To be the partner of choice for tenants, shoppers, employees and investors
	To provide a trustworthy, transparent and sustainable investment
	To promote social and environmental sustainability.

As set out in the integrated reporting framework of December 2013, the value created by any organisation over time may be disclosed in terms of six capitals — financial, operational, human, natural, social/relationship and intellectual.

This value can be viewed from two perspectives — value created for the company and value created for others. While providers of financial capital are interested in the value an organisation creates for itself, the value it creates for others aff ects its ability to create value for itself. Our business model illustrates how we balance this value creation for the benefit of all stakeholders, based on core principles:

	Invest in high-quality shopping centres in sub-Saharan Africa
	Focus on sustainable income growth for investors
	Provide a trusted and transparent investment
	Recognised social and environmental responsibilities.

Our integrated business model

Inputs

Business activities

Outputs

Outcomes

Financial

Sources of funding: debt and equity Economic climate

Capital investment growth Regular and progressive distribution growth Low and responsible gearing Disposal of non-core assets

CAGR of 32,1% over the last decade Premium to NAV of 4,6% Low LTV of 28,4%

Operational

High-quality, dominant shopping centres in metropolitan areas in strong economic nodes Internal asset and property management

Rising property values Strong contractual rental escalations Extracting synergies, eg national service contracts Well-contained cost structure Geographic diversification in high-growth countries

Low vacancies at 2,4% Arrears 0,4% of rent roll Improved cost-to-income ratio at 34,4% Sustainable income growth Distributions for the year up 11,3% Expansion into Africa Acquisition of Manda Hill

Intellectual

IT systems Regulatory compliance

Hyprop is a listed Real Estate Investment Trust (REIT) giving investors exposure to high-quality shopping centres in South Africa and in a select group of countries in sub-Saharan Africa

Integrated electronic property management system Internal functions such as human resources driven by technology Dedicated national legal executive

Reliable controls and processes enabling transparent disclosure Strong compliance to regulatory environment Provide a trustworthy and transparent investment Strong leases

Human

Experienced board of directors Hands-on executive management Employee development

Implemented share incentive scheme Well-managed portfolio of properties generating growing income Sound investments providing long-term superior investment returns

Low turnover of staff 3,9% Continuity Staff retention

Social and relationship

BBBEE and employment equity Education and training The Hyprop Foundation

Sustainable social responsibility through education, training and enterprise development

Addressing skills shortage Reliable succession plan Improved reputation

Natural

Environmental, social and governance strategy

Environmentally efficient properties Participation in Carbon Disclosure Project, Global Real Estate Sustainability Benchmark and Institute of Directors (IoD) governance assessment instrument

Reduced environmental footprint Energy saving of 4,9 million kWh, cost saving of R5,9 million Improved waste management 49 938m3 (67% of total waste) Lower cost of occupancy for our tenants AAA rating in IoD governance assessment instrument