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Hyprop Investments Limited
Integrated annual report and consolidated financial statements
2017
Risk and opportunity
management
continued
Strategic
objective
Key risk
Probable effects
Opportunity
Security
Secure
environment
for our
shoppers
Increased crime at
shopping centres
Hyprop forced to spend more on
security equipment
Enhanced security measures can differentiate our
properties and improve stakeholder experience and
time spent at our malls
Crime at shopping malls
Negative impact on footfall
Reputational damage for Hyprop and
its malls
Investment in sub-Saharan Africa (excluding SA)
Increase
portfolio and
geographic
diversification
Currency exchange rate
risk
Unable to repatriate funds due to
illiquid currency markets or capital
restrictions
Continually look for geographical diversification
opportunities to improve the quality of our portfolio,
guided by stringent investment criteria
Reduced distributable income
Weakening currencies place country
tenants under pressure
Excessive volatility in exchange rates
Slowdown in consumer
spend
Leases not renewed
Operating environment
Operating cost increases (specifically
municipal rates and taxes)
Cost of development increases
Investment risk
Returns below expectations
Default on shareholder funding
Development risk
Lower return or inability to achieve
target return
Political risk
Minimise
political risk
due to policy
changes
Governments adopt
policies that are
unfavourable to foreign
investors, particularly
movement of capital,
taxation and land
ownership
Share price fluctuations
Low economic growth in South Africa, coupled with
SA political uncertainty has prompted Hyprop to
diversify its geographic footprint into South-Eastern
Europe
Exchange rate fluctuations
National credit rating affected
Key:
n
Internal risks (under control of management)
n
External risks (can be mitigated by management)
n
External risks (outside control of management)