JSE-listed specialist retail fund Hyprop reported a strong performance for the five months ended May 31, 2025 and is well positioned to make new investments.
There had been a “sturdy performance” from the properties in South Africa and Eastern Europe for the five months to May 31, 2025, which “reflects the dominance and resilience of our portfolio despite geopolitical challenges,” CEO Morné Wilken said in a pre-close update.
“We continue to look for organic and new growth opportunities… Hyprop is confident of delivering strong growth in the coming year” he said. This would be driven by improved performance by the portfolio, solar and energy project benefits, lower interest costs and benefits of deploying capital.
Hyprop recently offered to buy control of MAS to expand in East Europe, for which R808m was raised via a bookbuild. Hyprop held R1.2 billion in cash and R2.2bn in available bank facilities, after the capital raise. LTV fell to 34.2% from 36.3% at 31 December 2024.
Wilken said the MAS transaction could be a game changer for Hyprop and provide it with access to new countries in the region, namely Romania and Poland. Shareholder approval is still required for the transaction.
He said that if the transaction did not proceed, the funds would be deployed to reduce debt, for asset management initiatives, organic growth opportunities and further solar-PV projects and new investments.
Hyprop adopted a new strategy in 2019 and progress has included optimising its portfolio, settling dollar equity debt in the sub-Saharan Africa portfolio, and selling the sub-Saharan Africa portfolio in return for shares in Lango, a pan-African real estate investment company.
LTV was reduced from a peak of 52%, euro equity debt fell to €87m from €403m, the structure was simplified, the credit rating improved, and further investments were made to enhance its South Africa centres and in Eastern Europe.
In the South African portfolio, tenant turnover rose 7% in the five months compared with the same period in 2024. Retail vacancies ended at 3.9%, primarily due to Edgars’ rightsizing its stores, which provided flexibility to secure new tenancies.
In the Western Cape, Edgars was performing well in the new rightsized space at Canal Walk. Overall, leasing activity was positive, with office demand increasing significantly. At Somerset Mall, the Phase 2 expansion was progressing well, and terms had been agreed to occupy the expanded space.
At CapeGate, the development of satellite offices around the centre was gaining traction. In Gauteng, Rosebank Mall added six new stores: Cannafrica, One Stop Travel & Tours, Drip4Life, Glow Theory, John Craig and Cajees.
Hyde Park Corner would be significantly enhanced in August with a new Checkers FreshX store. At Woodlands, the Pick n Pay supermarket was rightsized. The Glen completed its egress and ingress project in April and is refurbishing its exterior signage.
In Eastern Europe, tenant turnover increased by 3.5%, despite a decline in foot count of -3.3% mainly due to non-trading Sundays in Croatia, and recent store boycotts related to rising food prices.
The vacancy rate however was only 0.1% at May 31, 2025. In Croatia, City Center one East and City Center one West broadened their retail offerings. At The Mall in Bulgaria, various projects were completed including upgrading the lighting system, replacing the water meters, and replacing the roof structures over the parking ramps with more durable material.
Recent highlights at Skopje City Mall include the openings of Ehoreca and the new Gerry Weber mono-brand store that opened in February 2025.
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