Hyprop tenant turnover rebounds

Retail property company, Hyprop, has seen a remarkable resurgence in trading levels, almost reaching pre-pandemic activity for the six months ending 31st of December 2021. The company's consolidated loan-to-value has decreased by 42%, and the distributable income for the period exceeded 500 million rand. Hyprop CEO, Morné Wilken, attributes this success to the strategic repositioning of the company's malls and the focus on enhancing the tenant mix. During an interview with CNBC Africa, Wilken discussed the positive performance of the company during the interim period and highlighted the key areas where significant improvements were observed. One of the critical factors contributing to Hyprop's success is the emphasis on securing the right anchor tenants and introducing new uses within the malls to create a diverse shopping experience. Moreover, the company has leveraged storage facilities and made substantial redevelopments in its European properties to enhance the overall customer experience. As COVID-19 restrictions ease in Europe, Hyprop anticipates a further boost in foot traffic and trading performance. Despite challenges such as rising inflation and fuel costs affecting the South African consumer market, Wilken believes that the company's revenue growth will remain resilient in the short term and normalize in the long run. Notably, Hyprop has managed to reduce its debt burden by one billion rand in the last six months, demonstrating sound financial management practices and ensuring good liquidity in the portfolio. With a consolidated loan-to-value ratio of 41.5% and a healthy interest cover ratio of 3.25 times, the company is well-positioned to navigate potential challenges posed by rising interest rates. Looking ahead, Hyprop plans to focus on further acquisitions and consolidation efforts. The company aims to drive its reposition strategy in the South African portfolio, explore redevelopment opportunities, and enhance the dominance of its European properties. Additionally, Hyprop is set to implement a high-stick liquidity event involving the acquisition of four malls, which is expected to be accretive to income and strengthen the company's balance sheet. Wilken also emphasized the importance of creating real equity and maximizing upside potential in future investments. Overall, Hyprop anticipates growth and strength in its business, driven by a combination of strategic initiatives in Europe and South Africa. While short-term growth may be modest due to various market factors, the company remains optimistic about its long-term prospects and the potential for diversification in the years to come.