Hyprop Investments Limited Integrated annual report 2017

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22 Hyprop Investments Limited
Integrated annual report and consolidated financial statements2017
Financial director’s
report continued
Distributable earnings from investments in sub-Saharan Africa (excluding SA) reduced to R57,0 million (2016: R83,7 million), largely due to excluding
distributable earnings from Ikeja City Mall in Lagos, Nigeria, replacing tenants at lower rentals at Manda Hill Centre in Lusaka, Zambia, and Rand appreciation
against the US Dollar.
In the current year, R65,0 million (Hyprop share: R48,7 million) was applied to reduce senior in-country US Dollar debt in Nigeria. The repayment of capital
in respect of the in-country debt did mitigate in some respects the US Dollar liquidity constraints experienced in Nigeria.
Hyprop’s share of shareholder loans/AttAfrica interests in investment property
At 30 June 2017, the Hyprop share of the US Dollar value of the AttAfrica portfolio, Manda Hill and Ikeja City Mall was USD281,8 million
(2016: USD285,1 million) at a weighted average capitalisation rate of 8,4% (2016: 8,2%).
Hyprop’s share of distributable earnings
30 June
2017
R000
30 June
2016
R000
AttAfrica and Manda Hill 3 005 821 3 315 614
Ikeja City Mall, Lagos, Nigeria (75%) 1 476 553 1 740 658
Investments in sub-Saharan Africa (excluding SA) 4 482 374 5 056 272
The Rand equivalent value of investments in sub-Saharan Africa (excluding SA) at 30 June 2017 was R4,5 billion (2016: R5,1 billion). The net reduction was largely
due to Rand appreciation against the US Dollar, a reduction in the valuation of Ikeja City Mall and impairment of the AttAfrica shareholder loan in Hyprop
Mauritius.
Hyprop is currently not looking to increase its investments in sub-Saharan Africa (excluding SA).
Investments in South-Eastern Europe
Hyprop’s investments in South-Eastern Europe are held through a UK company, Hystead Limited, in which Hyprop has a 60% interest. The purchase of Skopje
City Mall in Skopje, Macedonia, for EUR92 million, was effective in October 2016.
Hyprop’s share of distributable earnings
30 June
2017
R000
30 June
2016
R000
Distribution received 147 059 37 000
Interest and expenses (45 236) (12 428)
Net 101 823 24 572
This distribution received comprises income from the two Delta City shopping centres in Belgrade, Serbia and Podgorica, Montenegro for 12 months and
from Skopje City Mall for eight months. Credit enhancement fees received by Hyprop for providing, funding support for the investments in South-Eastern
Europe are not included here, since the credit enhancement fees will not be recurring (refer to “Funding” below).
Trading conditions in the European shopping centres, including footcount and turnover growth, remain positive. Demand for space is strong and plans to
extend the centres are progressing.
Hyprop’s share of Hystead’s interest in investment property
At 30 June 2017, the Hyprop share of the Euro value of the Hystead portfolio was EUR179,9 million (2016: EUR123,7 million) at a weighted average capitalisation
rate of 8,7% (2016: 8,4%). The Hyprop share of the value of the Hystead portfolio represents 60% of the independent fair value of the underlying shopping
centres.
Hyprop’s share of distributable earnings
30 June
2017
R000
30 June
2016
R000
Delta City Belgrade, Belgrade, Serbia (60%) 1 162 200 1 283 136
Delta City Podgorica, Podgorica, Montenegro (60%) 685 698 744 888
Skopje City Mall, Skopje, Macedonia (60%) 833 208
Investments in South-Eastern Europe 2 681 106 2 028 024