Hyprop draws in a speedy R783m

It took retail-inclined realestate counter Hyprop barely four hours to raise R783m in an accelerated book-build exercise on Tuesday. /

It took retail-inclined real estate counter Hyprop barely four hours to raise R783m in an accelerated book-build exercise on Tuesday.

At 8am on Tuesday, Hyprop announced an initial intention to raise R600m in fresh capital, but a few hours later the company confirmed it had placed 7.45million new shares at R105 per share due to strong demand from investors.

Hyprop noted the placing of 7.45-million shares was the maximum number of shares the company could offer under its general authority to issue shares for cash. The book-build offer was dangled at a 4.9% discount tothe 30 business-day volume weighted average price. The uptake came as a surprise considering that property sentiment has been fairly tepid of late

A property sector analyst said the accelerated book build was a prudent move with the new shares placed at above Hyprop’s last stated net asset value of R102.20 per share. The source said the successful placement of Hyprop shares showed there was still strong investor demand for highquality property counters.

Hyprop advised that the proceeds would mainly be used to repay debt.

Hyprop CEO Pieter Prinsloo said the bulk of the proceeds would be used to settle local debt, noting that certain loan facilities expired shortly.

At the end of the interim period to December 31, the property company reported that a maturing five-year corporate bond of R300m had been repaid with the proceeds from noncore asset sales.

Hyprop then also indicated that maturing debt of R1.65bn would be refinanced in the coming months, and that a portion of this funding could be refinanced with corporate bonds.

At the end of the interim period, Hyprop pencilled in dividend growth of 8% to 10% for the full financial year to end June. A gross interim dividend of 376c per share was paid.