The successful repositioning of Hyprop Investment’s (Hyprop) South African (SA) portfolio is evident in the recovery in the trading performance of its tenants since the restrictions were lifted. Trading performance is back to pre-Covid-19 levels, or in some cases even higher, driven by Hyprop’s repositioning strategy called the Golden Thread.

The Sub-Saharan Africa (SSA) portfolio has also recovered well over the past few months, while in Eastern Europe (EE), the more stringent Covid-19 restrictions have delayed recovery, says Morné Wilken, Hyprop CEO.

Hyprop is a retail-focused REIT, owning various shopping centers with a total value of R42 billion. The Group is committed to creating safe environments and opportunities for people to connect and have authentic and meaningful experiences, which is achieved by owning and managing dominant retail centres in mixed-use precincts in key economic nodes in SA and EE.

“There are signs that the global impact of Covid-19 is reducing, and that economies are re-opening after two years of Covid-19 restrictions. We are optimistic that trading conditions will return to pre-Covid levels, as is evident in the trading metrics of all our portfolios in the last six months,” notes Wilken.

Financial performance

In the six months to 31 December 2021, Hyprop grew distributable income by 21% to R501 million on a like-for-like basis. This improvement reflects the reduction in Covid-19 discounts, lower expected credit losses on trade receivables, and savings in interest costs due to a reduction in its debt.

Distributable income per share for the six-month period was 146.5c (2020:160.6c). The reduction from the comparative period in 2020 results from the issue of new shares after strong shareholder support for the dividend reinvestment plan (DRIP) for the year to June 2021. The DRIP was supported by 85% of shareholders and raised R876 million in equity. Until market conditions stabilise, the board anticipates paying an annual dividend at year-end.

Over the past two years, Hyprop has strengthened its balance sheet. The consolidated loan to value (LTV) has improved from a peak of 51.7% in June 2020 to 41.5% at 31 December 2021, notwithstanding a decrease in the valuation of its SA portfolio over the same period. This was achieved through the recycling of non-core assets, being Atterbury Value Mart and Delta City in Belgrade, and successful DRIPs for the 2020 and 2021 financials years, says Wilken.

Regional performances

In South Africa, there was a 5.1% improvement in footcount year-on-year across the portfolio, and an 8.3% improvement in trading density, testament to the resilience of the centres and Hyprop’s repositioning strategy. Retail vacancies were at 2.4% at 31 December 2021, and subsequently further reduced to 1.4% as at 28 February 2022.

In EE access to most centres were restricted to shoppers with EU green certificates (proof of vaccination, negative antigen test or proof of recovery from Covid–19). This impacted on trading metrics, particularly at food courts. Overall footcount was up 12.8% year-on-year and trading density improved by 11.2%. Retail vacancies were at 0.3% in December. These restrictions have subsequently been lifted and there is a clear improvement in footfall across all the centres.

In SSA, footcount rose by 9.1% and trading density improved by 6.7%. Retail vacancies were 11.6% in December 2021. While Hyprop plans to exit the SSA portfolio, it is focusing on value creation through active asset management until this happens, which is evident in the improved trading metrics.

Implementation of the Hystead liquidity event

Hyprop currently owns 60% of Hystead, with PDI Investment Holdings owning the other 40%.

In February the Company announced it has concluded an agreement with Hystead to acquire four assets within the Hystead portfolio. These core assets are Skopje City Mall in North-Macedonia; City Center one East and City Center one West in Croatia; and the Mall of Sofia in Bulgaria. Hystead’s fifth property, Delta City Podgorica in Montenegro, is in the process of being sold and until the sale is complete Hyprop will retain its existing €45 million interest in the asset, representing 60% of the value.

The Hystead transaction is in line with Hyprop’s strategy for its EE portfolio of acquiring premium retail properties in their respective jurisdictions that have the potential for future growth through active asset management and development initiatives, drawing on Hyprop’s South African expertise.

“The transaction is in line with our strategy to further diversify our exposure into Eastern Europe, mitigating the company’s risk to the weaker South African economy, simplify the Group structure and will also address some concerns previously raised by shareholders specifically the Hystead funding structure,” commented Wilken.


Inflation is at elevated levels in the economies of many of our trading partners and will put pressure on margins. Hyprop’s repositioning strategies are appropriate in a low rental growth environment and are gaining traction, as evidenced in the results released today. We are optimistic that in time trading conditions will return to pre-Covid levels, indications of which are evident in the trading metrics of all our portfolios in the last six month.

“The key priorities for the next six months will be implementing the Hystead liquidity event with the disposal of Delta City Podgorica and the acquisition of the remaining four centres by Hyprop; continue to strengthen our balance sheet; annual reviews of our portfolio to ensure we retain assets that fit our strategy, continued repositioning of our SA portfolio, reduction of operational cost and the implementation of ESG initiatives. We will also closely monitor the impact of the invasion of Ukraine on our EE portfolio,” says Wilken.