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Business model |
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Strategy |
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Progress |
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| Scale |
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Hyprop is South Africa's largest listed retail
property fund with a market capitalisation,
as at 30 June 2013, of R19 billion and assets of
R23 billion. Most of our shopping centres are
dominant in terms of size, trading densities
and catchment areas. |
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Our strategy is to expand the
portfolio with properties of a
similar size and quality. There are
also significant opportunities to
upgrade and enlarge our current
portfolio of shopping centres. |
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During the period, store
enlargements and relocations at
Hyde Park have been completed.
Extensions to Edgars at The Glen
and Canal Walk to accommodate
Topshop, are scheduled to open
in December 2013. In the rest of
Africa, Atterbury Africa has made
significant progress in developing
quality shopping centres. The
detail of which can be found on
page 20 of the report. |
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| Focus |
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Hyprop's portfolio includes 11 prime shopping
centres, which comprise 95% of the total
direct property portfolio. Flagship assets
include Canal Walk in Cape Town, Clearwater
Mall and The Glen in Johannesburg as well as
Woodlands in Pretoria. Our core focus is to
invest in large, high quality shopping centres.
The remaining 5% of the portfolio is made up
of select offices. |
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We have a proven track record
of buying existing centres
and successfully improving
and expanding them through
refurbishment and development.
The portfolio is actively managed
with the sale of smaller, non-core
assets. This strategy has
successfully created strong income
and capital growth and will remain
the focus in the future. |
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In the last six months, Hyprop
exchanged its holding in Sycom for
direct ownership of Somerset Mall
in the Western Cape. |
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| Quality |
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Hyprop's shopping centres are distinguished
by their superior quality.
Key differentiators include:
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Size in terms of GLA |
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Located in strong metropolitan areas with
mid to high levels of income |
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Tenant diversity |
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Presence of flagship national and
international stores |
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Preferred shopping destinations among
shoppers |
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The quality of Hyprop's
portfolio is evidenced by the
high occupancy level of 97,3%.
The intention is to maintain
and continuously improve the
portfolio. Opportunities abound
from national tenants to increase
their footprint in large shopping
centres, while international brands
continue to enter South Africa
with aggressive roll-out plans. |
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To meet retailer demand, Hyprop
has spent R91 million over the last
six months on redevelopments
and expansions. Several projects
have been approved for the year
ahead. The redevelopment of
the Rosebank Mall is the largest
project underway with a budget
of R932 million. Details of progress
can be found on pages 2 and 3 of the report. |
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| Defensiveness |
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Hyprop's portfolio is defensive due to
prime locations and a diverse tenant mix,
dominated by blue-chip retailers. Distribution
growth has consistently surpassed
expectations, yielding average growth of
8,7% over the past 5 years. This reflects the
fact that well-managed and high quality
assets can weather a challenging economic
climate. |
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Hyprop's strategy is to maintain
the quality of its portfolio in order
to be defensive in challenging
times and leveraged when
economic prospects improve. Our
leading position in terms of size,
location and quality makes us the
preferred landlord for premium
local and international brands. |
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For the period under review,
we have signed 240 new leases
with several retailers. We have
an ongoing capital programme
to ensure our centres are
continuously improved. |
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| Innovation |
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In order to remain competitive and relevant,
Hyprop seeks to be innovative, especially
in terms of adapting to changing consumer
trends as a result of social media. Our efforts
are not restricted to digital initiatives.
They extend to innovative solutions for
our retail tenants such as converting office
space to retail space where feasible and
demand exists.
We have also introduced initiatives designed
to reduce the impact on the environment
and conserve scarce resources. |
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We introduced the green design
and environmental strategy in 2012
and have made significant inroads.
Implementation is practical and
takes into account a cost benefit
analysis. |
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Hyprop's portfolio has a total of
233 000 followers on Facebook
and our energy saving initiatives
are widespread
(See www.hyprop.co.za and
page 20 for further details). |
