Johannesburg - Shopping centre group
Hyprop Investments [JSE:HYP] renewed a cautionary announcement to investors on Thursday on a potential acquisition, amid industry talk that it is out to acquire Attfund - one of the country's largest unlisted property funds.
Analysts have said that Attfund's shopping centres would fit well into the Hyprop portfolio.
Attfund's R8.5bn portfolio includes the Clearwater Mall in Johannesburg, Centurion Mall in Pretoria and the Garden Route Mall in George.
"It would make fantastic sense for shareholders," said an analyst, who declined to be named.
In May this year Attfund CEO Louis Norval told Fin24.com that a deal with Hyprop could be on the cards, even as the fund is looking to list on the JSE.
"In an ideal world, asset wise, it would be great to combine Attfund and Hyprop in one specialised portfolio," he said.
Attfund announced this year it is on track to make good on a promise to investors to list the group's local properties by end-2011.
Hyprop is the third-biggest property company on the JSE, but is fast running out of growth opportunities within its portfolio.
Its malls have been refurbished or extended and the opportunities to sweat its assets are running low. Also, the group's focus is on scarce top quality shopping centres.
Analysts believe another potential acquisition may be the 25% stake in Canal Walk not yet owned by Hyprop.
Canal Walk is considered the jewel in its portfolio and contributes to about 40% of the group's revenues. The potential acquisition would, however, depend on whether its owner, the Ellerine Brothers Group, would be interested in selling.
Hyprop's acquisition of Attfund, if it becomes a reality, will force Redefine Properties - the second-biggest company on the JSE's property counter - to either sell its 45.7% stake in Hyprop or accept the resultant dilutionary effect on the group's income yields.
As Hyprop accounts for 73.6% of Redefine's listed property portfolio, Redefine shareholders will have the final say on whether the group will maintain its stake.
Hyprop was unable to comment on the speculation and Attfund could not be reached for comment on Friday.
- Fin24.com