Construction World November 2020

PROPERTY

HYPROP RISES ABOVE COVID-19 CHALLENGES HYPROP, a retail-focused REIT listed on the JSE, today reported annual results demonstrating management is navigating successfully through very uncertain times.

sheet and its exposure to Euro- and Dollar-denominated debt secured by Rand-denominated assets are high priorities. These objectives will be achieved by lowering cash distributions, the exit strategy from sub-Saharan Africa and recycling assets,” commented Brett Till, CFO of HYPROP Investments. The Group’s LTV at 30 June 2020 was 41,4%. It was negatively impacted by the decrease in the value of investment property as a result of COVID-19, some impairment on the African assets and the devaluation of the Rand. The Group’s interest cover ratio (ICR) was 3,0 times at period end. The South African portfolio Good progress was made on the repositioning of the South African Portfolio. During the reporting period, exposure to the Edcon Group was reduced successfully and three new Checkers FreshX stores were secured as anchor tenants at The

Morné Wilken, CEO of HYPROP Investments.

T KH RSHUDWLQJ HQYLURQPHQW LQ 6RXWK $IULFD ZKLFK ZDV GLͦFXOW pre-COVID-19, was exacerbated by the virus outbreak, particularly after a very strict lockdown was imposed on 26 March 2020. Despite the stalled economy, management made progress towards achieving the Group’s strategic objectives, which included growing trading densities by repositioning the South African portfolio and introducing capital-light revenue streams. The Group’s distributable income before the impact of COVID-19 was in line with guidance provided in September 2019, at 664 cents per share. The impact of COVID-19 reduced distributable income by R434-million to 493,4 cents per share. Revenue lost, on the South African portfolio, due to COVID-19 totaled R267-million, mainly R242-million of rental discounts and deferrals granted to tenants between April and June 2020. An additional estimated R25-million was lost on parking and Non-GLA income during the same quarter. “This year will be recorded in history as one of the toughest years globally. The safety and wellbeing of our staff, tenants and service providers were our top priorities during all levels of lockdown and we worked very hard with tenants to survive the challenging circumstances as a collective. I am very proud of our team and deeply grateful to all our frontline workers, who continued to work hard during unprecedented times,” noted Morné Wilken, CEO of HYPROP Investments. Balance sheet 6LJQLͤFDQW VWHSV KDYH EHHQ WDNHQ WR VWUHQJWKHQ WKH *URXS̵V EDODQFH sheet. The Group’s Dollar-denominated debt was reduced by $271-million over the last two years, from the proceeds of the sales RI WKH $IULFDQ DVVHWV DQG UHͤQDQFLQJ 'ROODU GHQRPLQDWHG GHEW in Rands while R1,2-billion of cash was retained from the 2020 ͤQDQFLDO \HDU WR UHSD\ GHEW ̸6WUHQJWKHQLQJ WKH JURXS̵V EDODQFH

Glen, Rosebank Mall and Woodlands. The Group made good progress in completing three of the six solar projects in Gauteng, while Canal Walk secured a 5-Star Green rating. We successfully concluded a portfolio deal with Massmart and agreed new 7-year leases on the Game stores, combined with upgrades to the new Game concept store, and new 10-year leases DV ZHOO DV XSJUDGHV WR WKH ODWHVW VSHFLͤFDWLRQ IRU WKH %XLOGHUV Warehouse stores at Atterbury Value Mart and Woodlands. The space vacated by the closure of Dion Wired has been relet, at Somerset Mall to Toys R Us, Hyde Park Corner to PNA, and Canal :DON WR D QHZ ORRN ͥDJVKLS VWRUH IRU 3(3 7KH ͤUVW 62.2 'LVWULFW ZKLFK LV SDUW RI WKH *URXS̵V QRQ WDQJLEOH asset strategy, is scheduled to open in the Rosebank Mall in WKH ͤUVW TXDUWHU RI 62.2 PHDQV ̸PDUNHW̹ DQG WKH 62.2 District will serve as a marketplace where retailers can rent space DQG UHXVDEOH VKRSͤWWLQJV YLD D ͥH[LEOH GLJLWDO OHDVLQJ SODWIRUP ZLWKRXW WKH VLJQLͤFDQW ͤQDQFLDO FRPPLWPHQWV LQ WKH WUDGLWLRQDO retail environment. The leasing platform is powered by data driven shopper, product and trend analyses, resulting in location recommendations that will match retailers, products and shoppers, across our portfolio. “As the stringent COVID-19 lockdown levels are relaxed, we are seeing an increase in foot counts at our malls, and more activity and enquiries from potential new tenants. After months of lockdown, ZH DUH UHDͦUPLQJ WKDW ZH DUH VRFLDO EHLQJV ZKR OLNH WR LQWHUDFW DQG experience life, justifying our strategy of creating safe environments and opportunities for people to connect and have authentic and meaningful experiences.” said Wilken. Retail vacancies were 2,4% at the end of the reporting period, with annual rental escalations maintained at a promising 7,1% and tenant retention at 91%.

CONSTRUCTION WORLD NOVEMBER 2020 20