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The South African market for properties that suit our portfolio is

limited, with few sales and transactions at high prices where they take

place. We disposed of a number of non-core assets during the period

and are considering approaches on some remaining non-core assets.

The non-South African portfolio performed in line with expectations.

Manda Hill and the Accra Mall traded well; West Hills Mall in Accra

opened during the period with strong footfall, but lower trading

densities than targeted, and the remaining developments are

proceeding. Although the current weakness in the Ghanaian economy

has had a minimal effect on our trading malls, we have elected to delay

further developments on existing properties.

We will continue to consider acquisitions in Africa and other emerging

markets where assets of appropriate quality become available at

acceptable yields.

Hyprop produced a strong financial performance for the year, with

the distribution for the second six-month period increasing by 16,3%

over the comparable period in 2014 and the annual distribution rising

by 15,0%. Results for the year benefited from increased income from

Rosebank Mall, the net benefit of income from the Somerset Mall

over the lost Sycom income, tight control of operating expenses and

effective management of the interest expense.

The level of foreign shareholding in Hyprop increased substantially

during the period. While this was common to many South African

REITs, it was also influenced by Hyprop’s inclusion in the Morgan

Stanley Capital International MSCI emerging market index from end-

May 2015.

Outlook

Although certain international economic agencies are forecasting

slightly higher levels of growth for South Africa in the medium term,

current growth levels are concerning and predicted improvements are

well short of what is required to address the fundamental problems in

the economy.

We will continue to invest in our portfolio to ensure our properties

remain destinations of choice for consumers. We have an enviable mix

of retailers and work hard to support their growth in our properties.

Demand for space in our malls remains strong and, with the right

investment, these assets should provide attractive returns for the

foreseeable future, despite constraints in the macro-economy.

We expect the African portfolio to perform solidly, particularly as

the West Hills Mall gains traction and trading densities improve. We

continue to investigate appropriate opportunities in Africa and other

emerging markets.

The macro-economic context in which we operate dictates a cautious

outlook and a number of commentators on the listed property sector

are arguing for substantially more muted growth in future than in

recent years. Despite this, we believe our portfolio is well structured

with sufficient tenant depth to produce satisfactory returns over the

medium term.

Sustainability

We recognise the importance of a sustainable business and of

sustainability in the different facets of our business.

Our commitment to being a good corporate citizen pervades our

approach to business and we endeavour to act in a responsible,

balanced and commercially sensible manner. As such, we ensure our

business model is sustainable and that it remains relevant to the

economies we operate in.

We are conscious of our impact on the environment and have been

measuring and mitigating that impact for a number of years. We have

made meaningful progress and our process has become increasingly

sophisticated, with demanding goals and tight accountability for

outcomes.

Transformation is a priority for successful South African businesses.

Hyprop has demonstrated regular improvement in this area and while

our rating will be affected by the new codes and their impact on the

property charter, we will continue to implement initiatives that yield

sensible and sustainable outcomes.

Corporate governance

Hyprop is committed to the highest standards of corporate

governance. This integrated report sets out details of our governance

structures and the extent to which we comply with relevant codes of

corporate governance and regulatory requirements.

Board changes

There were no changes to the board or to its committees during the

review period, other than Mike Lewin taking the chair of the social and

ethics committee.

Appreciation

On behalf of the board, I thank our executives, management and staff

for their efforts during the year. I also thank our stakeholders for their

support, and my fellow board members for their contributions.

Gavin Tipper

Chairman

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Hyprop Investments Limited

Integrated Report 2015