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Johannesburg – The interim results of Hyprop Investments [JSE:HYP] have shown that shoppers are back in malls as the group posted an 8.1% increase in distributions growth.
CEO Mike Rodel told the media on Tuesday that Hyprop has been seeing growth in the retail market since the last quarter of 2009.
"We're also seeing increased optimism among retailers, in terms of deals being concluded and the level of interest from potential tenants," said Rodel.
The group reported an 8.1% increase in distributions growth for the six months to end-June 2010, while revenue and distributable earnings from shopping centres jumped by 19% and 17% respectively.
Hyprop's portfolio includes coveted centres like Hyde Park and the Rosebank Mall in Johannesburg, as well as the Canal Walk in Cape Town.
The retail-focused group said higher electricity rates and taxes will, however, put tenants under pressure.
The group has consequently boosted its provision for doubtful debts by 40% (R5.3m), bringing total provisions to 61% of total arrears.
"This is a good set of results," said Naeem Tilly of Avior Research. According to him, the group should achieve distribution growth of 8.9% for the full year.
"This is still a big year for Canal Walk in terms of renewals," he said. The group said 34% of Canal Walk's leases come up for renewal this year.
The Stoneridge Mall in Edenvale also seems to be past the worst of the economic downturn, Rodel said. The group reported that Stoneridge vacancies dropped by about 15% during the past six months.
Redefine takeover bid
Meanwhile, minority shareholders have until Friday to accept the takeover offer from Redefine Properties.
Redefine has recently increased its stake in Hyprop from 33.3% to 45.2%.
In terms of this acquisition, Redefine had to make a compulsory offer to the remaining Hyprop unit holders at 5 000c per unit.
Hyprop shares are trading at around 5 200c, and reached a high of 5 400c before Redefine's intentions were made clear.
"I don't think the shareholders will go with it," said Tilly.
According to him, a premium of about 15% on the group's current share price would be fair to account for the diversification benefits to Redefine’s portfolio, the cost benefits and the fact that Redefine will be able to exercise control over Hyprop.
"From the Hyprop side it's not very fair, but will be good for Redefine shareholders," he said.
Hyprop's board recommended its shareholders to reject the offer last week.
Hyprop has declared an interim distribution of 174 cents per unit.
- Fin24.com
CEO Mike Rodel told the media on Tuesday that Hyprop has been seeing growth in the retail market since the last quarter of 2009.
"We're also seeing increased optimism among retailers, in terms of deals being concluded and the level of interest from potential tenants," said Rodel.
The group reported an 8.1% increase in distributions growth for the six months to end-June 2010, while revenue and distributable earnings from shopping centres jumped by 19% and 17% respectively.
Hyprop's portfolio includes coveted centres like Hyde Park and the Rosebank Mall in Johannesburg, as well as the Canal Walk in Cape Town.
The retail-focused group said higher electricity rates and taxes will, however, put tenants under pressure.
The group has consequently boosted its provision for doubtful debts by 40% (R5.3m), bringing total provisions to 61% of total arrears.
"This is a good set of results," said Naeem Tilly of Avior Research. According to him, the group should achieve distribution growth of 8.9% for the full year.
"This is still a big year for Canal Walk in terms of renewals," he said. The group said 34% of Canal Walk's leases come up for renewal this year.
The Stoneridge Mall in Edenvale also seems to be past the worst of the economic downturn, Rodel said. The group reported that Stoneridge vacancies dropped by about 15% during the past six months.
Redefine takeover bid
Meanwhile, minority shareholders have until Friday to accept the takeover offer from Redefine Properties.
Redefine has recently increased its stake in Hyprop from 33.3% to 45.2%.
In terms of this acquisition, Redefine had to make a compulsory offer to the remaining Hyprop unit holders at 5 000c per unit.
Hyprop shares are trading at around 5 200c, and reached a high of 5 400c before Redefine's intentions were made clear.
"I don't think the shareholders will go with it," said Tilly.
According to him, a premium of about 15% on the group's current share price would be fair to account for the diversification benefits to Redefine’s portfolio, the cost benefits and the fact that Redefine will be able to exercise control over Hyprop.
"From the Hyprop side it's not very fair, but will be good for Redefine shareholders," he said.
Hyprop's board recommended its shareholders to reject the offer last week.
Hyprop has declared an interim distribution of 174 cents per unit.
- Fin24.com
