Hyprop lowers its distribution as it exits investments


Hyprop lowers its distribution as it exits investments

Published Date: 2019-09-06 | Source: Stephen Gunnion | Author: Stephen Gunnion

Hyprop lowers its distribution as it exits investments

The group is selling its assets in Africa outside SA due to a difficult trading and declining property prices.

Hyprop has trimmed its full-year distribution and says next year's dividend is also likely to be lower as it strengthens its balance sheet.

The real estate investment trust has a R51 billion portfolio of shopping centres in South Africa, sub-Saharan Africa (SSA) outside SA and Eastern Europe through UK subsidiary Hystead. While it grew distributable income from its SA and European portfolios in the year to end-June, it was weighed down by its SSA portfolio, which it's busy selling due to a difficult trading environment and declining property prices. Although it's made progress with this, it impaired its investment in the region by R1.46 billion based on what it expects to fetch for the properties.

Distributable income from its SA property portfolio, which includes the upmarket Rosebank Mall and Hyde Park Corner, grew 6.5% despite the challenging economic environment, while its Eastern European portfolio grew distributable income by 13.5%. But total distributable income fell slightly to R1.903 billion due to a decline in income from SSA.

The REIT declared a total distribution for the year to end-June of 744.9c, down 1.5% from a year earlier, and said it would probably only achieve growth in distributable income in its 2021 financial year.

Hyprop said its priorities over the next 18 months included repositioning its SA portfolio to increase trading densities and create more value. It also planned to dispose of the remainder of its SSA portfolio and improve the dominance of its Eastern European Portfolio with extensions to properties and asset management initiatives.

It said its liquidity position was strong after refinancing R8.5 billion of debt during the year.

Its shares sank 11% to R59.96 yesterday.

Similar Stories