South African real estate investment trust (REIT), Hyprop Investments Limited, has released its pre-close operational update for the five months ending May 31, 2023, showcasing impressive growth and expansion across its portfolio.
During the period, Hyprop’s operational performance showed steady improvement, with notable gains in tenant turnover and asset management. The company’s South Africa (SA) portfolio witnessed a substantial 9.8% increase in tenant turnover compared to the previous corresponding period, surpassing 2019 levels. Additionally, Hyprop’s properties in Croatia, Bulgaria, and North Macedonia experienced a significant year-on-year rise of 17.64% in tenant turnover, while in Ghana, tenant turnover in local currency terms surged by 26.11% during the four months leading up to April 2023. These positive results can be attributed to the successful implementation of Hyprop’s repositioning strategy in SA, post-Covid-19 recovery in Eastern Europe (EE), and improved asset management in sub-Saharan Africa (SSA).
Hyprop’s South Africa Portfolio showcased several refurbishments, relocations, and new store openings across its various properties. Somerset Mall saw the opening of new stores like Freedom of Movement, RocoMamas, Spur, and Toy Kingdom, while construction is underway for Checkers Fresh X and a new mini-food court. Notably, Rosebank Mall experienced a reduction in vacancy rates, and new stores such as Cultish, The Bed Shop, Side Step, and Game4U have opened, with future store openings including Toys R Us and Wimpy.
Clearwater Mall witnessed the opening of Yoyo Bubble Tea and Kase Artist, alongside store refurbishments by PnP and Cinnabon. The installation of new escalators and other enhancements are expected to be completed by November 2023. Canal Walk introduced new stores like Top Tailor and the first UNIQ store in South Africa, while existing stores such as Carlton Hair, Old Khaki, Queenspark, Sneaker Factory, and Thomas & Benno underwent refurbishments.
In the Eastern Europe portfolio, Skopje City Mall secured H&M as a tenant for its second flagship store in North Macedonia, while other stores like KRS Kids, Sport Lab, Beo Sport, and Buzz were relocated or expanded. Skopje City Mall also welcomed The Body Shop and the newly renovated Nike flagship store. At City Centre one East, new tenants like Triumph, A1, Salamander, L’Occitane, and Pandora joined the retail mix, while refurbishments and renovations took place at various stores.
The Mall in Sofia, Bulgaria, will soon see the opening of Tedi, a German value retailer, and Dunk Shop, a trendy basketball and lifestyle concept store. Other new tenants include Ozone, Skiny, and Pink Opium. Refurbishments and rightsizing efforts were carried out at stores such as Sinsay, Bohemia, and Zlatarna Dodić.
Hyprop’s trading metrics for the SA portfolio showcased positive growth across various key indicators. Tenant turnover for the five-month period saw a year-on-year increase of 9.80%, while trading density and footcount also demonstrated steady growth. Additionally, the vacancy rate reduced from 4.7% in December 2022 to 2% at Rosebank Mall. Rent reversions stood at 10.1% for the 11 months ending May 2023.
Despite ongoing challenges with loadshedding in South Africa, all of Hyprop’s centers continued to operate during power outages, thanks to full backup generator capacity. The cost of loadshedding during the period amounted to R55.3 million, of which R47.7 million (86%) was recovered through backup solutions.
Hyprop Investments CEO, Morné Wilken, expressed his satisfaction with the company’s operational performance and growth. He highlighted the successful execution of their repositioning strategy in SA, the positive impact of inflation on the EE portfolio, and the improved asset management in SSA. Wilken also reassured stakeholders that their centers have remained operational during loadshedding.