Clearwater Mall Secures South Africa’s First Walmart Store

Clearwater Mall, owned and managed by Hyprop Investments, will become home to South Africa’s first Walmart store, marking the American retail giant’s debut entry into the local market.

The announcement transforms Clearwater Mall’s retail offering and introduces Walmart’s distinctive “Every Day Low Prices” model to South African consumers. Unlike traditional sale-driven retail, shoppers will benefit from stable pricing across thousands of products year-round, eliminating the need to wait for promotional periods.

“Being selected as the location for South Africa’s first Walmart store demonstrates the strength of our retail offering and our commitment to the West Rand community,” said Kelly Belman, General Manager of Clearwater Mall. “The creation of more than 80 new jobs adds real economic value to our region, which makes this announcement even more meaningful.”

The store will occupy the mall’s upper level, featuring wide aisles, clear signage and bright lighting. Product categories span fresh and frozen foods, groceries, health and beauty products, clothing, baby essentials, homeware, electronics, toys and seasonal items.

Walmart’s product strategy emphasises local partnerships, with the majority of merchandise sourced from South African suppliers. Select international offerings will include the Beautiful range by actress Drew Barrymore – a collection of stylish kitchen appliances designed to bring premium quality to everyday cooking.

Public excitement has been building steadily since the announcement, with the store set to create more than 80 positions ranging from shop floor roles to management.

“The addition of Walmart is expected to increase foot traffic and create positive ripple effects for neighbouring businesses within the centre,” concluded Belman.

The Walmart Clearwater store will be located at Clearwater Mall upper level, Hendrik Potgieter Road and Christiaan de Wet Road, Strubens Valley, Roodepoort. The official opening date will be announced in the coming weeks.

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Initiative Aims to Celebrate Nicole’s Legacy through Community Action and Compassion for Animals.

The Hyprop Foundation’s Warm Woodrock charity drive is currently underway, calling on the public to support animal welfare in loving memory of Nicole Greenstone. Nicole, a cherished colleague and friend, passed away in August 2024. She is remembered not only for her professionalism and warmth but for her profound compassion for animals, which has shaped her life.

This initiative, established by the Hyprop Foundation, was created to keep Nicole’s legacy alive by supporting animal shelters that reflect her values. With this in mind the foundation’s Warm Woodrock project will support Woodrock Animal Rescue, a Gauteng-based shelter known for its hands-on approach to animal care, rehabilitation, and rehoming.

Running until the end of August, the drive invites the public to donate blankets, pet food and essential supplies for dogs, and cats. Branded collection bins are located at five Hyprop shopping centres: Hyde Park Corner, Clearwater Mall, Woodlands Shopping Centre, The Glen Shopping Centre, and Rosebank Mall.

“Our goal is simple,” says Leonie Prinsloo from the Hyprop Foundation. “We honour Nicole by championing a cause she held close to her heart, giving vulnerable animals a second chance at life. Nicole’s compassion was a beacon of hope for both people and pets. By participating in this initiative, you can turn her legacy of kindness into real, life-saving action.”

Each centre is also hosting a live caricature artist on select weekends. Visitors who drop off donations receive a free, personalised sketch of themselves and their pet, a small thank you for helping make a difference. Upcoming caricature artist appearances include 16 August at Clearwater Mall and 23 August at The Glen Shopping Centre.

“Nicole poured her heart into helping those who needed it most, especially animals with no voice of their own, adds Prinsloo. “By supporting Warm Woodrock, you honour Nicole’s legacy and give hope and a future to animals in desperate need. Help us give animals the love and care Nicole gave so freely. Your support truly makes a difference.”

Woodrock Animal Rescue, established in 1992, is one of South Africa’s oldest independent pro-life animal shelters. It is home to hundreds of rescued animals and relies entirely on public support to operate. The partnership with the Hyprop Foundation brings much-needed supplies, awareness, and funding to its mission.

Donation guidelines and a QR code linking directly to Woodrock’s website are available at each collection point, offering digital options for those unable to donate items in person.

The Hyprop Foundation, Hyprop Investments’ Corporate Social Investment arm, is committed to making a meaningful impact in the communities surrounding its shopping centres. The Hyprop Foundation focuses on education and skills development, community upliftment, and enterprise development, and strongly believes in building a better future by investing in people, places, and the planet. Warm Woodrock is a testament to the Hyprop Foundation’s commitment to making a real difference. Partnering with Woodrock Animal Rescue brings its value of compassion and community to life.

Join us in honouring Nicole’s legacy and making a real difference for animals in need. Visit any participating Hyprop retail centre or scan the QR code at donation bins to find out how you can support Warm Woodrock.

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“Our sturdy performance during the period reflects the dominance and resilience of our portfolios in South Africa and Eastern Europe despite geopolitical challenges,” CEO Morné Wilken said. “We continue to look beyond the short term for organic and new growth opportunities to deliver value for all our stakeholders.

“In line with our growth and diversification strategy, we recently announced our intention to make a voluntary offer for a controlling stake in MAS plc to expand our footprint in the Eastern European market, for which we have raised R808 million via a book build. We believe the MAS plc transaction could be a game changer for Hyprop and will give us access to new countries in the region, namely Romania and Poland. However, before proceeding with the transaction, we must meet certain conditions, with one key condition being approval from our shareholders.

“If this transaction does not proceed, we can effectively deploy these funds into reducing debt in the short term, as well as for asset management initiatives, organic growth opportunities, further solar-PV projects and new investments within Hyprop’s expansion strategy.”

Hyprop is strongly positioned to make investments, with R1.2 billion of cash and R2.2 billion in available bank facilities, after receipt of the capital raise proceeds. The cash injection took the LTV ratio down from 36.3% at 31 December 2024 to 34.2%.

Since the Group embarked on its new strategic journey in 2019, it has made significant progress, including optimising its EE 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. In the same period, Hyprop reduced its LTV from a peak of 52%, shaved its euro equity debt from €403 million to €87 million, simplified its structure, improved its credit rating, and continuously invested in enhancing the attractiveness and sustainability of its centres in South Africa and Eastern Europe.

SA and EE centres maintain attractiveness

In the South African portfolio, tenant turnover rose 7% in the five months ended 31 May 2025 compared with the same period in 2024 while trading density increased by 10.2%. At 31 May 2025, retail vacancies were 3.9%, primarily due to Edgars’ rightsizing its stores in the portfolio, which provides flexibility to secure new tenancies to meet shoppers’ demands. The weighted average reversion rate remains in positive territory at 2.9%, and the retail new deal reversion rate was very pleasing at 13.5%.

All the centres have made good progress with letting and projects. Here are some of the highlights:

In the Western Cape, Canal Walk is pleased to see that Edgars is performing well in the new rightsized space, which includes a world-class fragrance and cosmetics offering. Overall, leasing activity has been positive, with office demand increasing significantly. At Somerset Mall, the Phase 2 expansion of the centre is progressing well, and terms have been agreed with several stores which will occupy the expanded area, including Game, Computer Mania, Total Sports, a variety of athleisure and affordable luxury brands such as New Balance, Burnt, Curve Gear, and Napapijri, an international outdoor apparel brand. At CapeGate, the development of satellite offices around the centre on a leasehold basis is still in the early stages, but it is gaining traction and already attracting potential tenants.

In Gauteng, Rosebank Mall enhanced its tenant mix by adding six new stores: Cannafrica, One Stop Travel & Tours, Drip4Life (IV drip experts), Glow Theory (Korean beauty store), John Craig and Cajees (a watch and accessories retailer). Hyde Park Corner will be significantly enhanced in August with the opening of a new Checkers FreshX store. At Woodlands, the Pick n Pay supermarket has rightsized from 5 600m² to 3 636m² and a new lease agreement has been signed with a franchisee. The Glen completed its egress and ingress project in April and is currently refurbishing its exterior signage.

In Eastern Europe, tenant turnover increased by 3.5% and trading density rose by 4.0%, 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. Despite these challenges, tenant demand remains robust, as reflected in the modest 0.1% vacancy rate at 31 May 2025.

In Croatia, City Center one East and City Center one West continued to broaden their retail offerings. At The Mall in Bulgaria, various projects have been completed to enhance the sustainability and efficiency of the centre: upgrading the lighting system, replacing the water meters to enable remote reading, and replacing the roof structures over the parking ramps with more durable material. Recent highlights at Skopje City Mall include the grand openings of Ehoreca, the official Nespresso reseller in North Macedonia, and the new Gerry Weber mono-brand store that opened in February 2025.

Enhancing energy, water and waste resilience

Hyprop is focusing on solar-PV installations at its centres and is taking the necessary steps to add a further phase at The Glen. Meanwhile, CapeGate, Somerset Mall and Canal Walk are beginning their initial phases of solar projects. In June 2025, the Group will issue a request for proposals to the energy wheeling market to enhance both existing and new solar-PV installations. Once these solar-PV and wheeling energy projects are completed, they are expected to supply more than 60% of the SA portfolio’s energy requirements. Additionally, the total carbon emissions of the SA portfolio, relative to the 2019 baseline which was aligned with Science-Based Targets, will be below the carbon reduction targets set for 2030.

The three-day backup tanks and pumps for potable water have been installed at all Gauteng centres, with similar initiatives set to start soon in the Western Cape. The organic waste recycling initiatives have proven highly effective, with five centres (Canal Walk, CapeGate, Somerset Mall, The Glen and Woodlands) achieving net zero waste status.

Looking ahead

“Our focus is on creating retail spaces that connect people by providing excellent retail experiences for our tenants and shoppers while unlocking value through initiatives within our existing portfolios in South Africa and Eastern Europe,” Wilken said.

“We will continue to pursue both new and organic growth opportunities in our preferred geographies (being the Western Cape and Eastern Europe), reposition the SA and EE portfolios to maintain their dominance and retain and grow market share, annually review our portfolios and recycle capital where appropriate, implement sustainable solutions to reduce the impact of the infrastructure challenges we face in South Africa, and ensure our balance sheet remains robust.

“Hyprop is confident of delivering strong growth in the coming financial year through improved operational performance of its portfolios, including benefits from solar and other energy projects anticipated to come on stream, a reduction in interest costs and the benefits from deploying the additional R808 million of capital, even in the absence of the MAS transaction,” Wilken added.

Hyprop expects to release its results for the six months to 30 June 2025 on or about 16 September 2025.

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Hyprop Investments, a specialist property retail fund listed on the JSE and A2X, published strong half year results for the period ended 31 December 2024, reporting double-digit growth in distributable income of 14.5% to R765 million and 14.4% increase in distributable income per share to 201.4 cents. The Group declared an interim dividend of 113.43 cents per share, equating to 95% of the distributable income from the SA portfolio for HY2025.

“The solid performance for the period is a result of the transformative strategic priorities outlined in 2018. The improved trading metrics of our portfolios affirm our centres’ relevance in their respective markets, coupled with our shoppers’ loyalty and resilience during the challenging economic times,” says Hyprop CEO Morné Wilken.

“Our confidence is based on the fact that our centres in South Africa and Eastern Europe are located in key economic nodes and supported by our management teams who have strong retail property expertise.”

For the period, Hyprop maintained a strong liquidity position and held R807 million of cash and R1.1 billion of available bank facilities. As a result of the recent sale of its sub-Saharan Africa portfolio to Lango Real Estate in exchange for shares, Hyprop has been released from all guarantees and commitments to the lenders relating the Africa debt. The balance sheet reflects a steady loan to value (LTV) ratio at 36.3% and cash collections from tenants in South Africa and Eastern Europe at 99.8% and 100.8% of net billings, respectively.

South African portfolio

“All key trading metrics were positive in the six months to end-December 2024. There was a slight increase in vacancies to 2.4% (excluding Pick n Pay at Hyde Park Corner, where Checkers has been secured as a replacement tenant), which is mainly due to rightsizing some anchor tenants’ stores which is in line with strategy. The low vacancy rate creates flexibility to improve and optimise the tenant mix,” Wilken says.

Tenants’ turnover rose 4.9% compared to the same period in 2023, while trading density (rands per square metre per month) lifted by 4.4%.

In this period, management focused on pursuing organic growth opportunities, such as the Somerset Mall expansion and the development of satellite offices around CapeGate Shopping Centre on a leasehold basis with development partners SOM and Giflo.

At Canal Walk, Western Cape’s only super-regional, new concepts such as the first JD Sports in the country, the first stand-alone Silki store in South Africa, and the maiden flagship store for Shift Espresso Bar were introduced. After rightsizing, the Edgars store on the first floor is trading extremely well, and the space it has vacated has been re-let to Jet, Home. Tech. Sleep. and another national tenant.

Somerset Mall is making good progress on its two-year expansion project to add 5 500m² of GLA for 50 new stores, retile and improve the centre’s flow. CapeGate’s initiatives to enhance the overall shopper experience included the installation of an advanced audio system and improved signage. The roof is being refurbished to enable the installation of 5 MW of solar panels. The centre management team at Table Bay Mall has been strengthened, following its acquisition in Hyprop’s 2024 financial year.

In Gauteng, Rosebank Mall has introduced several unique concepts and completed various projects, including upgrades for Tap & Go/Apple Pay at all pay stations and the control room, as well as the installation of e-hailing screens in the waiting areas. A new Checkers FreshX store is under construction at Hyde Park Corner and is scheduled to open in July 2025. Clearwater Mall, Woodlands and The Glen opened several new stores, all enhancing each centre’s tenant mix.

The SA portfolio’s distributable income grew to R454 million in the six months to end-December 2024. Excluding Table Bay Mall, rental and other lease income increased by 4% compared with the same period in 2023 and total revenue was up 4.7%. Utility costs were lower than in the comparable period, due to the reduction in loadshedding and the additional solar plants commissioned at Woodlands, Clearwater and Table Bay Mall. Net property income increased by 18.6% (10.7% excluding Table Bay Mall) over the first half of the 2025 financial year.

Eastern Europe portfolio

Tenants’ turnover grew 8.8%, with trading density increasing by 7.1%. There is strong demand for space in Hyprop’s four centres, which is reflected in the modest 0.2% vacancy rate at 31 December 2024.

City Center one West completed an extension and upgrade of its food court, introducing five new restaurants, while City Center One East, The Mall and Skopje City Mall attracted several high-profile tenants. At Skopje City Mall, Cineplexx renovated its cinema halls and successfully launched M House, a new roastery café, enhancing the food court’s offering.

Distributable income from the EE portfolio was R308 million, an increase of 34% over the comparable period, despite the rand strengthening by 4% against the euro. In euros, total revenue increased by 11%, due to indexation increases and strong growth in turnover-based rentals. Property expenses rose 9%, mainly because wages across the region increased, resulting in a 12% improvement in operating income.

ESG

Various energy initiatives are being pursued to manage energy costs and carbon emissions and ensure uninterrupted trading. As previously communicated, power purchase agreements (PPA) for solar energy are in progress. To protect the supply of water, backup tanks are being installed at Gauteng centres, while similar initiatives are planned for the Western Cape centres, based on recent water audit findings. Over the last five years Hyprop reduced its electricity usage by 29.6% and water consumption by 10.2%.  Five of Hyprop’s centres have achieved net zero waste status and diverted 544 tonnes of organic waste from landfills.

The Group’s total contribution towards CSI projects in the six-month period was R7.7 million.

Outlook

Wilken said, “Hyprop’s management team will pursue its five strategic initiatives: pursuing new and organic growth opportunities; repositioning in South Africa and Eastern Europe to maintain the centres’ dominance and grow market share; annually review and, if appropriate, recycle assets; implement sustainable solutions to offset infrastructure challenges in South Africa; and protect the robustness of the balance sheet.”

Hyprop expects to meet the higher end of its guidance communicated in September 2024 of a 4% to 7% increase in distributable income per share for the full year to 30 June 2025.

The Group’s board has decided to increase its dividend payout ratio to a payment of an interim dividend equivalent to 95% (previously 90%) of the distributable income from the SA portfolio and payment of a final dividend on finalisation of the Group’s annual audited results, so that the total distribution for the financial year (including the interim dividend) is equivalent to 80% (previously 75%) of the Group’s distributable income from the SA and EE portfolios.

“As a business, we are confident in our ability to continue our growth trajectory, supported by the strength of our retail centres in South Africa and Eastern Europe. We are optimistic about the exciting projects in our pipeline, which align with our strategic priorities and will drive sustainable value for all our stakeholders,” concludes Morné Wilken.

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Retail centre owner and manager supported over 30,000 children and 1,300 teachers
through this impactful initiative.

Hyprop is proud to celebrate another year of impactful partnership with the Santa Shoebox Project, one of South Africa’s most cherished charitable initiatives. Throughout 2024, Hyprop’s eight malls across the country played a key role in spreading festive joy, of the total 74 751 Santa Shoeboxes donated around the country this year, 23 636 of them came through Hyprop’s malls helping to positively impact disadvantaged children.

“The support of the Hyprop malls and the Hyprop Foundation enable our beloved Santa Shoebox Project to achieve its mission of providing equal access to quality education for all children in South Africa facilitated through acts of kindness. It is incredibly valuable to have a partner in Hyprop that shares our values,” shared Santa Shoebox Project spokesperson, Debbie Zelezniak.

Since its inception in 2006, the Santa Shoebox Project has transformed lives by delivering over 1.3 million personalised shoeboxes filled with essentials and gifts to underprivileged children across South Africa. Hyprop’s continued financial and community support has significantly enhanced the project’s reach and effectiveness.

Significant contributions over the years

Over the past three years, the Hyprop Foundation has contributed a total of R1.1 million to the Santa Shoebox Project, distributed as follows:

• 2024: R400,000, benefiting 574 teachers and 12,048 children
• 2023: R350,000, benefiting 238 teachers and 4,150 children
• 2022: R350,000, benefiting 508 teachers and 14,442 children

This consistent financial investment has supported the training of teachers in Early Childhood Development (ECD) programmes, equipping them with essential skills such as perceptual training, learning through play, and creating toys from recyclable materials. Over the three years, Hyprop’s contribution has positively impacted the lives of 30,640 children and provided over 1,300 teachers with valuable skills.

A year of community and generosity

This year, Hyprop’s centres once again served as vibrant collection hubs for the Santa Shoebox Project, encouraging shoppers to participate by donating personalised shoeboxes filled with essential items such as toiletries, school supplies, clothing, toys, and treats.

Reflecting on the partnership, Leonie du Preez from the Hyprop Foundation commented, “The Santa Shoebox Project demonstrates the significant impact of collective giving. At Hyprop, we are dedicated to supporting initiatives that uplift communities and spread joy. Our financial contributions, along with the enthusiastic involvement of our shoppers, have made 2024 another successful year of giving.”

The annual participation of Hyprop’s centres has strengthened community ties and made it easier for the public to engage with this beloved initiative. Over the years, Hyprop has helped collect tens of thousands of shoeboxes, bringing cheer to children across South Africa.

A Lasting Legacy

Through the Hyprop Foundation, the group channels its Corporate and Social Investment initiatives aimed at fostering meaningful change by focusing on education and skills development, community upliftment, and enterprise development. The Santa Shoebox Project shares a broader mission that includes building pre-schools, training teachers, and creating reading corners, which aligns with Hyprop’s commitment to enhancing education and uplifting communities.

As 2024 draws to a close, Hyprop celebrates its continued role in supporting this important initiative and looks forward to its further impact in the coming years.

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Hyprop, a total returns-focused fund that specialises in retail property announced its operational update for the four months ended 31 October 2024. The Group’s dominant retail centres in South Africa and Eastern Europe continued to grow tenants’ turnover and trading density. This reflects management’s ongoing repositioning initiatives and leasing strategies, combined with better consumer sentiment.

“The pleasing performance reflects our investments over the last few years, not only in centre and tenant upgrades and improvements but also in energy and water projects at all our centres,” said Hyprop CEO Morné Wilken. “We have given particular attention to areas most affected by infrastructure decay, to ensure our tenants and shoppers can continue to trade without disruption.”

The company’s pre-close operational update showed a pro-forma improvement in the loan-to-value ratio (LTV) to 35.2% at end-October from 36.4% at end-June, and an increase in interest cover to 2.62 times from 2.5 times. This follows the completion of the disposal of the sub-Saharan Africa (SSA) portfolio to Lango Real Estate Limited. At the end of the period, Hyprop held R575 million cash on hand and R1.2 billion of available bank facilities, after paying the 2024 dividend.

Given factors such as the improvement in the overall risk environment, that Hyprop has caught up on historic capital underspending in SA, the sub-Saharan portfolio has now been sold and Hyprop’s balance sheet strength, the Board intends to review the dividend policy and payout ratio. Any changes will be communicated when the results for the six months ending 31 December 2024 are released in March 2025.

Operational performance

South Africa

In the four months to end-October, Hyprop welcomed several new stores to its centres in South Africa, some of which were “firsts” for the country. It also refurbished and “right-sized” (expanding some spaces and reducing others) stores, where necessary.

Tenants’ turnover in this period was 5.2% higher than in the same period in 2023 and trading density was 3.9% better. Foot count was flat (-0.2%). The improving trend in rent reversions continued, with a positive weighted average reversion rate of 6.7%. Retail vacancies, at 2%, were well controlled.

Some of the highlights were:

In the Western Cape, Canal Walk has been enhanced by some exciting new concepts. These include Old School, a retailer specialising in the sale of South African sports supporters’ jerseys and other merchandise; and the first South African store for Baseus, one of the world’s fastest-growing consumer electronics brands. Silki, which sells luxurious skin, hair and body care products, opened its first stand-alone store.

Hyprop is adding 5 500m² of GLA at Somerset Mall as a part of its redevelopment and expansion project. The project planning is progressing well with most council and other regulatory approvals obtained. Construction work will commence later this financial year and is expected to be complete at the end of July 2026. The project will add 50 new stores to the vibrant centre, focusing on affordable luxury and athleisure as well as family entertainment and food.

In Gauteng, new store openings in Rosebank Mall included the first Cable & Co (fashion and footwear) in Gauteng and Ajmaan, which sells modest clothing. Continental Linen, Waxit and Ribz N Wings all opened during the period. In July 2024, the Soko District became fully let.

The Glen welcomed Porter & Craft, a luxury leather goods retailer and Cannafrica during the period. While The Glen Continental Linen and Chateau Gateaux during the period.

There were exciting developments at Hyde Park Corner. The Forum (a new events venue) and Workshop 17 (flexible office space) both opened in October. The centre also welcomed new outlets for strong global brands such as Birkenstock and Ted Baker; Avenue 2A, which houses international luxury brands; Colourbox, an international and local luxury lifestyle brands retailer; Kids Around, a luxury and premium children’s fashion brand; and Health Works, a health store that offers both products and a blend of traditional healing and cutting edge services.

Eastern Europe (EE)

The EE portfolio continued to achieve strong operational results in these four months, notably in tenant turnover and trading density. Asset management initiatives and investments in upgrades have distinguished Hyprop’s centres from its competitors, allowing it to benefit from the overall growth in retail within the region.

As at 31 October 2024, the EE portfolio’s retail vacancy rate was an impressive 0.2%. Tenants’ turnover was up 11.5% for the four-month period compared with the same period in 2023 and trading density lifted by 9.4%. Foot count was 1.6% higher.

Some of the highlights were:

In Croatia, both City Center one East and City Center one West reported growth in all key metrics, including foot count, despite the non-working Sundays Trade Act, which allows retailers to operate only 16 Sundays per calendar year. Centres are not allowed to trade on public holidays.

In Bulgaria, The Mall’s new tenants included Jeff de Bruges, a new premium chocolatier concept; Intesa, a locksmith; Stilna jena, a Bulgarian ladies fashion brand; Sunday Habit, a Bulgarian influencers’ merchandise shop; and Elenski Balkandjii, a farmer’s deli shop.

In North Macedonia, Skopje City Mall continues to refine its tenant mix and will soon welcome Gerry Weber, M House Roastery Café and mobile operator M-tel. Cineplexx has undergone a comprehensive upgrade, and Skopje City Mall is now the only centre in North Macedonia with a state-of-the-art cinema as part of its entertainment offering.

Environmental initiatives

Hyprop has made progress on ensuring energy and water security for its centres in South Africa, with a gas and battery storage project underway at Rosebank Mall. Management is taking steps to source solar power through Power Purchase Agreements at The Glen and Cape Gate and is looking at wheeling green energy from a third party to Canal Walk and Somerset Mall. Projects have started to install potable water storage at Clearwater Mall, Woodlands and Hyde Park Corner and similar projects will begin at the Glen and Rosebank Mall in 2025.

Canal Walk, Somerset Mall, Woodlands, and The Glen have all achieved net zero waste status. The integration of Table Bay Mall with the Group’s waste management strategy is progressing.

Outlook

Wilken said management’s priorities in the current year and beyond would include driving the implementation of sustainable solutions to reduce the impact of the infrastructure challenges we face in South Africa, expedite organic growth opportunities, for example, the Somerset Mall expansion in the South African portfolio, reviewing the portfolios annually to evaluate the case for recycling of assets and to consider new growth opportunities, disposing of the shareholding in Lango and redeploying the capital into new growth opportunities, and maintaining the health of the balance sheet.

“With these priorities in place, we are well-positioned to pursue growth opportunities without being hindered by past structural, financial, and asset-related issues,” he said.

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“Discernible green shoots in the global and domestic economies, combined with Hyprop’s sustainable business model, excellent property portfolios, strong balance sheet, prudent capital management, and continuous investment in keeping the portfolio relevant, in our human capital and environmental initiatives, should position us to deliver further growth and value for all our stakeholders over the long term,” CEO Morné Wilken says.

“The Group’s outlook is positive, despite the difficult global economic environment and unique challenges in each of the regions in which we operate. We are optimistic that the peak of inflation and interest rates is near, but the Group’s financial performance will still be negatively impacted in the short term by high interest costs and the timing of the implementation of the sale of the sub-Saharan Africa portfolio.”

Hyprop’s distributable income was 370.4c a share for the year to 30 June 2024, a reduction of 8.6% from 405.2c reported for the year to 30 June 2023. In March 2024, management warned shareholders there would be a 15-20% decrease, owing to higher interest costs for longer, an increase in issued shares due to the dividend reinvestment plan, further foreign exchange losses on its Nigerian properties and the acquisition of Table Bay Mall. The reasons for a better outcome included a strong operational performance from the SA and EE portfolios as well as improved cash management, lower hedging costs and reduced margins on refinanced borrowings, the impact of withholding the interim dividend and timing delays in capital projects, which all offset the higher interest costs.

A final dividend of 280c a share (2023: 299.3c a share) was declared in-line with the dividend policy being 75% of the distributable income from the SA and EE portfolios.

In the year under review, Hyprop acquired Table Bay Mall for R1.68 billion, and the centre is trading well as it is being integrated into the portfolio. Since year-end, the Group has signed binding legal agreements to dispose of its sub-Saharan Africa (SSA) portfolio (centres in Nigeria and Ghana) to Lango Real Estate Limited, in exchange for Lango shares. This will free Hyprop’s management to focus on the core portfolios in SA and EE.

Over the past five years, a number of steps have been taken to reinforce Hyprop’s balance sheet. The loan to value (LTV) ratio was maintained at 36.4% in June 2024, despite the debt-funded acquisition of Table Bay Mall and impairment of the SSA portfolio in line with the sale transaction. At end-June 2024, Hyprop was in a strong liquidity position, with R803 million of cash and R2 billion of available bank facilities. At present, 80% of the interest rate exposure is hedged.

SA portfolio
Despite a challenging domestic economic environment, the Group’s nine centres (four in the Western Cape and five in Gauteng), achieved higher tenant turnover, foot count and trading density. The overall rent reversion rate improved to positive 5.8% compared to negative 7% a year ago.

Canal Walk opened 20 new stores in the past year. Somerset Mall launched a new Checkers FreshX and upgraded Pick n Pay Hypermarket, while a key project to improve the food journey supporting Ster-Kinekor was completed. Somerset Mall is in the midst of a two-year expansion project which will add 5 400m² of GLA. Rosebank Mall is benefiting from an improved tenant mix, reporting a 10.9% increase in tenants’ turnover and 8.5% growth in foot count. Woodlands opened three new drive-thrus for Steers, Burger King and Chicken Licken, The Fun Company and W Cellar (as part of the Woolworths extension project).

At Hyde Park Corner, the renovation of the north office block and The Forum is progressing well. Workshop 17 and The Forum will open in October 2024 and Workshop 17’s offices are expected to have a positive impact on the centre’s trading.

The independent valuation of the South Africa property portfolio was R25.4 billion in June 2024 (2023: R23.03 billion). The revaluation includes the costs of acquiring Table Bay Mall and shows the result of higher net operating income.

EE portfolio
The EE properties delivered excellent results, as they benefited from wage escalations in Europe as well as lower inflation and electricity prices across the region. European team continued to optimise the tenant mix and invest in projects and upgrades to maintain the centres’ dominant market positions. Across the portfolio, trading density rose by 8.9% year-on-year and retail vacancies at period end were 0.1%, an improvement from 0.3% a year earlier.

The Mall in Bulgaria completed a new staircase link from the centre into the new food court, which should improve the performance of the food tenants. Despite new legislation in Croatia that limits trading hours, City Center one East grew tenant turnover by 10.9% and trading density by 11%. City Center one West’s tenants’ turnover increased by 11.4% and trading density by 12.2%. Skopje City Mall enjoyed its most successful year since opening, with tenant’s turnover up by 7.5% and trading density by 8% compared with 2023. This year, a project will be completed to centralise all the ATMs and upgrade the Cineplexx complex.

The valuation of the EE portfolio increased from €574.7 million (R11.8 billion) in June 2023 to €610 million (R11.9 billion) in June 2024.

SSA portfolio
Weak economic conditions in West Africa, particularly in Nigeria, affected the trading performance of the centres, as did the marked depreciation of local currencies against the dollar.
Ikeja City Mall in Nigeria has welcomed four new tenants, which reduces its vacancy rate to below 1% at present from 2.1% at end-June 2024. In Ghana, replacement tenants were secured for the space vacated by Game in December 2022: ten-year leases have been signed by Melcom and Decathlon in all three of the centres.
The transaction to dispose of the portfolio to Lango is expected to be completed before 31 December 2024.

Other significant developments
Hyprop spent R81 million on energy projects in the year, including the installation of solar PV at Woodlands, Rosebank Mall and Clearwater Mall, but excluding Table Bay Mall. This year, work will begin on installing new solar PV at The Glen and CapeGate. Various projects to conserve water are underway, and the installation of potable water storage at several centres is about to commence. The Group has also spent R21.7 million on various initiatives to minimise waste and increase recycling.
Outlook
“More positive sentiment is evident in businesses, consumers and retailers in South Africa as a result of the formation of the Government of National Unity and more stable electricity supply. Globally, interest rate cuts are anticipated from the US Federal Reserve, which should encourage the South African Reserve Bank to cut rates also, giving much-needed relief to consumers, in turn having a positive impact on our operations” says Wilken.

Hyprop anticipates that it will achieve a 4-7% increase in distributable income a share for the year to 30 June 2025 compared with 2024. This increase is conditional on, among other factors, contractual rental escalations and market-related lease renewals, no further deterioration in South African electricity supply or the economy, and no other regional or global disruptions.

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In one of the largest real estate transactions in Africa over the past year, Lango Real Estate Limited has agreed to acquire the Africa (ex-South Africa) retail real estate portfolio ultimately owned by JSE-listed REITs Hyprop Investments Limited and Attacq Limited.

Lango, a leading real estate company focused on direct investments into prime commercial assets in key gateway cities across the African continent, agreed on the acquisition of a portfolio of four shopping malls located in Accra, Ghana and Lagos, Nigeria, with an attributable value in excess of US$200 million.

The assets acquired include three retail assets in Ghana, including the iconic Accra Mall, one of the leading retail assets on the continent, along with Kumasi City Mall and West Hills Mall. Ikeja City Mall, arguably the most successful retail asset in Nigeria, was also acquired. The portfolio was acquired via an issue of Lango shares to the vendors, along with part debt-finance, with RMB acting as lead arranger.

Launched in 2018, Lango was originally established by South Africa’s largest primary JSE-listed REIT, Growthpoint Properties Limited, and LSE- and JSE-listed global investment manager, Ninety One (previously Investec Asset Management). Growthpoint also has a c.20% shareholding in Lango, alongside other notable South African and international institutional investors.

Lango has an established track record in concluding successful and accretive transactions, such as the RMB Westport property portfolio, the largest portfolio acquisition on the continent (excluding South Africa), and has achieved further significant growth. It has successfully managed to aggregate a high-quality portfolio of commercial real estate assets to attain meaningful scale and relevance in the sector.

Lango focuses on prime income-generating office, industrial and retail assets spread across key gateway cities in four countries: Ghana, Zambia, Nigeria and Angola. Assets include landmark properties such as the Standard Bank (Stanbic) head office in Ghana, Standard Chartered Head Office in Ghana, Manda Hill Shopping Centre in Zambia, and The Wings, an A-grade office complex in Victoria Island, Lagos.

Thomas Reilly, CEO of Lango, says, “This transaction is a significant milestone for Lango and not only fits squarely into our growth strategy, but is also highly accretive. The scale achieved by Lango undoubtedly positions it as a leading Sub-Saharan African firm in the industry. Lango will now have c.US$875 million of assets under management across four countries, with arguably some of the best-performing landmark commercial properties across both the retail and office sectors in select growth cities. These assets are well-positioned to allow Lango to extract synergies and further enhance growth with a high degree of resilience to differing market cycles.”

Reilly adds, “We are excited to once again take advantage of a highly attractive entry-point in the cycle, adding quality yielding assets in select cities to our asset base at competitive prices, which we believe have the potential to offer strong growth prospects. The business continues to enjoy significant momentum, and we expect this to aid in the delivery of sustainable long-term investor returns.”

Morne Wilken, CEO of Hyprop, adds, “Hyprop management has previously committed itself to achieving several strategic initiatives, with the exit of Sub-Saharan Africa being one of the last remaining initiatives to be completed. The successful implementation of this transaction will achieve this initiative, and we look forward to working with Lango to completion.”

Attacq CEO, Jackie van Niekerk, comments, “Our Rest of Africa (ex-South Africa) investment has become a small component of Attacq’s real estate investments and has been earmarked as part of an exit strategy by way of an orderly disposal. We are delighted to reach a point where a transaction with a credible counterpart in Lango has been agreed.”

Reilly concludes, “The growth and scale that Lango has achieved, supported by our partners in this transaction, enhances Lango’s ability to further entrench and capitalise on its position as a dominant player in the African real estate market, and creates a platform to facilitate considerable future growth as it heads toward a listing on the LSE.”

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