Hyprop lifts its distribution to investors 18%

Posted On Monday, 12 July 2004 02:00 Published by eProp Commercial Property News
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Acquisitions, low rates boost performance

Angelique de RauvilleListed property loan stock company Hyprop Investments says its buoyantretail property portfolio has boosted its distribution to unitholders to77c a unit for the six months to June, an 18% increase on the 65,1c distributionfor the corresponding period last year.

The company reported the increase on Friday, and Hyprop MD Pieter Prinslooattributed the surge in distributions to acquisitions of properties suchas Canal Walk Shopping Centre in Cape Town as well as to the reductionin interest rates.

The 77c a unit distribution is part of a total seven-month distributionto unitholders of 89c a unit.

The additional 12c is the distribution for the month of July.

Prinsloo said Hyprop was able to fix about 80% of its debt at a lowlevel.

"When we bought Canal Walk we were able to lock into a very good interestrate," he said.

"The retail portfolio's excellent performance is the significant contributingfactor in our continually increasing distributions to unit holders."

Hyprop's regional shopping centres also include The Glen, Hyde Park,and the Rosebank Mall in Gauteng.

Angelique de Rauville, MD of listed property portfolio management company Provest, which is part of the Investec Property Group, said Hyprop's performancereflected a "top quality retail property portfolio .

"We know that retail properties have outperformed offices and industrialsduring the last five years," said De Rauville. Provest's view is that inthe current high consumer spending environment retail would continue tooutperform office properties. In line with this, Hyprop would be expectedto substantially outperform the market in earnings growth , said De Rauville.

She said Provest's view was also that the listed property sector woulddistribute earnings growth of between 4% and 6% on a 12-month rolling view.

Andisa Securities property analyst Len van Niekerk said the distributionwas higher than he had expected. "I was looking for 70,3c for the six monthsto June 2004," Van Niekerk said.

He said vacancies at Canal Walk had come down. "The rest of the portfolioalso seems to be performing well," he said.

To facilitate its growth strategy the fund has already raised R125mfrom an issue of units for cash in May. This adds to the estimated R250mto be raised through a rights offer later this month.

The fund intends to purchase an additional 25,05% interest in The Glenat a cost of R113m to raise its total stake to 75,15%.

"The increased stake will enable Hyprop to participate more fully inThe Glen's growth potential," said Prinsloo.

The Glen's first phase of expansion is under way at a total cost ofR86m with 6000m² of new retail space replacing the former waterfrontarea and enabling existing tenants Absa and Mica Hardware to expand. Thesecond phase, to expand a further 4000m², is in the planning stagewith costs estimated at R35m.

Last modified on Wednesday, 14 May 2014 13:02

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