Archives for September 29, 2022

 

Growthpoint Student Accommodation REIT will open three new university student residences for South Africa’s 2023 university academic year. Peak Studios on the doorstep of the University of Cape Town, Brooklyn Studios alongside the University of Pretoria and Apex Studios at the entrance of the University of the Witwatersrand (Wits) in Johannesburg will together house 2,200 students in brand-new quality accommodation.

Building on its trusted range of student residences designed to enhance the university experience and academic success, the new properties increase Growthpoint Student Accommodation REIT’s purpose-built upscale student accommodation portfolio to 7,200 beds. Its 2023 portfolio includes 10 residences serving tertiary education students in three cities across South Africa.

It has also launched Thrive Student Living by Growthpoint, a growing student accommodation platform and programme, instantly recognisable wherever it is found nationwide.

“Thrive Student Living offers a new perspective on learning and living, devoted to academic success, personal growth, safety and community – creating environments where students can thrive. It is committed to supporting tomorrow’s leaders to reach their full potential,” says George Muchanya, Head of Growthpoint Investment Partners, manager of Growthpoint Student Accommodation REIT.

Growthpoint Student Accommodation REIT leverages the skills and expertise of leading South African international property company Growthpoint Properties, with local purpose-built student accommodation pioneers Feenstra Group, to provide accommodation that is not only purposely designed for student life but also purpose-managed to provide a more successful, supportive and satisfying university experience.

All elements of the student experience are considered from the welcoming, upmarket physical accommodation infrastructure to social and environmental factors such as communal space, on-site amenities like Wi-Fi and computer labs, and safety and security. They also offer 24/7 support from friendly Student Life Managers, provide a strong bridge between the academic faculty and the student’s home base, and have a year-round calendar of programmes and events.

All this is blended into Thrive Student Living, which is uniquely designed to enhance the university experience through an immersive campus lifestyle with comprehensive academic support and a fun range of cultural, social, sporting, well-being, career and supporting activities.

“More than premium student accommodation with easy access to classes, Thrive Student Living is designed to foster inclusive learning communities for achieving academic success, and also for students to get the most out of campus life and make great memories,” explains Muchanya.

Because learning isn’t one-size-fits-all, there are various Thrive Student Living options suited to a wide range of private and NSFAS students. Thrive Student Living environments are also the natural choice for corporate bursary programmes invested in the positive educational outcomes of their bursary recipients. They are managed to the high standards of JSE-listed Growthpoint, which takes seriously its duty of care for the people who use its buildings and is active in initiatives for quality education access across the entire education value chain as part of its transformative corporate social responsibility.

Growthpoint Student Accommodation REIT is not only opening new doors for students but has opened up a new opportunity for investors, and specifically impact investors, to access the defensive, alternative student accommodation asset class with strong fundamentals and proven resilience.

Since launching in December 2021, it has raised R1.4bn in equity, including Growthpoint’s co-investment of R240m, and continues to attract solid investor interest. Growthpoint Investment Partners has appointed a dedicated Fund Manager of Growthpoint Student Accommodation REIT, Amogelang Mocumi.

Its portfolio of 7,200 beds for the 2023 university year is valued at some R3bn.The properties include Burnett Studios, Hatfield Studios, Festival Studios, Varsity Studios, Kingsway Place, The Richmond and Central Studios. Each Thrive Student Living residence is an inclusive community for learning located a short walk from its university campus. While part of a national network of student accommodation, each has its own identity and character, unique to and created by its community.

Its three newest properties, Peak Studios, Brooklyn Studios and Apex Studios, are being developed by Growthpoint Properties and Feenstra Group. Growthpoint Properties is recognised for its green building leadership, creating healthy, sustainable environments and operating with a social consciousness that adds value to communities. Fashioning vibrant campus communities aligns with Growthpoint’s ESG goals.

“With Growthpoint Student Accommodation REIT expected to achieve significant growth towards a national tertiary education footprint with prime tailor-made new developments for which there is a great demand, its positive impacts go beyond education and ultimately boost job opportunities, municipal revenues and communities,” confirms Muchanya.

 

Learn more about Thrive Student Living by Growthpoint and Growthpoint Student Accommodation REIT

The post Thrive Student Living opens new doors appeared first on Growthpoint Properties.

Hyprop, the owner of dominant retail centres in key economic nodes in South Africa, Eastern Europe (EE) and elsewhere in sub-Saharan Africa, reported a strong operational performance in the 2022 financial year and a robust financial position.

Distributable income for the year ended 30 June 2022 increased to R1.17 billion, from R1.09 billion the year before, despite only including three months of the European portfolio’s income and the loss of income due to the sale of Atterbury Value Mart at the beginning of the financial year. The South African portfolio’s distributable income increased by 9% on a like-for-like basis and the European portfolio delivered R110 million of net operating income for the three months, ahead of our forecast of R98 million.

The Hystead “liquidity event” became effective in the second half of the year. This transaction enabled Hyprop to take 100% control of the four remaining EE shopping centres with effect from 31 March 2022.

The Group’s fully consolidated loan to value (LTV) ratio has decreased to 36.4% in June 2022 from a peak of 51.7% in June 2020, well below the 55% ratio set out in the covenants to the Group’s Domestic Medium-Term Note programme agreed with the banks.

“We are pleased about the good operational performance of all our centres. It is a good indication that our strategy is paying off. Unfortunately, the risk in the current economic environment remains elevated, with the rising inflation and energy cost and therefore we will remain cautious and conservative in our approach and strategy,” says Morné Wilken, Hyprop CEO.

South African portfolio

In the year to June 2022, tenant turnover, one of the key indicators of centre health, increased by 13.6% and it continued to rise by 14.9% in July 2022 and 15.6% in August 2022. All the centres’ tenant turnover increased by double digits.

At period end, retail vacancies across the portfolio were 2% (June 2021: 2.4%) and by August 2022 it had fallen to 1.5%. The independent valuation of the South African portfolio at 30 June 2022 was R22.7 billion, a 2.6% increase compared to 30 June 2021. During the year, Hyprop spent R260 million on the repositioning strategies at its centres.

A number of new tenants and modern new brands have been opened across the Group’s centres including the first Zara, Ted Baker and UNION-DNM stores in our SA portfolio in Canal Walk. Other standouts are improvements to the tenant mix at Rosebank Mall, the successful completion of the revamp of the food court at Clearwater Mall, and the completion of the reconfigured upper level at The Glen.

Eastern Europe portfolio

Total tenant turnover at the EE centres rose 14.5% in 2022 and retail vacancies at end-June 2022 were 0.7%.

Some of the highlights in EE include the completion of a large outdoor playground at Skopje City Mall and the addition of new, diversified offerings in the food court. City Center one East and City Center one West have welcomed new, fresh brands, including a Hoću knjigu bookstore, Xiaomi – Mi, selling electronics, various food offerings and well-known sneaker and streetwear retailer, SNIPES.

At The Mall in Sofia, the first phase of upgrading the bathrooms is expected to be completed by November 2022 and the second phase will begin in Q1 2023.

The Ukraine/Russia war has not directly affected the EE properties, although the higher energy costs have eroded consumers’ spending power and increased tenant occupancy costs. Hyprop will continue to monitor the situation and react appropriately.

The independent valuation of the EE portfolio by CBRE is €573 million at end-June, which is close to the €575 million valuation used for the transaction. €1.9 million was spent during the year on upgrades to and refurbishments of the EE properties.

Sub-Saharan Africa (excluding SA) portfolio

Foot count across the centres in Ghana and Nigeria was 3.5% higher year-on-year at end-June, while retail vacancies have fallen to 10.1% (June 2021: 12.2%). Measured in local currencies, the centres are showing a gratifying improvement in key metrices, since the focus has been on improving the centres’ operating performance pending exit.

In Rands, Hyprop’s attributable share of earnings after tax (before the effect of property evaluations) rose by 22% year-on-year, driven largely by a 4% increase in revenue and lower bad debts. The average US dollar/rand exchange rate had only a marginal effect.

Highlights included the opening of a flagship Nike store at Ikeja City Mall in Lagos, a first of its kind in West Africa. New brands also opened at Accra Mall, West Hills Mall and Kumasi City Mall.

On 8 September Hyprop Mauritius and AIH International (the co-shareholder in AttAfrica) signed a term sheet on the sale of 100% of AttAfrica. This transaction is still subject to final negotiations and further details will be published in due course.

Waste, water and energy

Hyprop has introduced a wet waste strategy across its portfolio from 1 July 2022, with a target of zero wet waste by 2027. In the past year, the volume of recycling rose to 79% from 78% in 2021. Projects to reduce water consumption over the past year include the introduction of low flush volume Propelair toilets at Rosebank Precinct and Hyde Park Corner.

Hyprop has audited the energy usage across all its centres and identified opportunities to reduce carbon emissions. In the current year, additional solar capacity will be installed at Rosebank Mall, Clearwater Mall and Woodlands.

The year ahead

Management has set six strategic priorities for the year ahead: repositioning the South African portfolio; retaining the dominance of the European portfolio; annually reviewing the portfolios to consider recycling assets and growth opportunities; extracting returns from the sub-Saharan portfolio pending exit; further developing non-tangible assets; and maintaining a healthy balance sheet.

“We will continue to focus on generating sustainable total returns for shareholders through optimal capital allocation based on risk-adjusted returns, whilst maintaining a healthy balance sheet,” Wilken says.