Shoppers heading back to malls, says Hyprop
Hyprop Investments, which owns Rosebank Mall, Hyde Park Corner and Canal Walk, reported an 8.6% foot count rise and tenant turnover leaping 16% year on year in the five months to end-May as consumers returned to shopping malls.
Despite the economic downturn with higher inflation and rising interest rates, growth in foot traffic might continue as the fear of some shoppers of contracting the coronavirus are allayed by the government lifting masks mandates last week. This is good news for Hyprop, who is looking to stay in SA and expand in Eastern Europe, but get out of its sub-Saharan African markets of Nigeria and Ghana.
“We are making progress on the exit of our sub-Saharan centres and continue to manage these assets effectively while busy with this process,” CEO Morné Wilken said on Wednesday in a preclose operational update.
Turnover in Ghanaian cedi was up 7.4% in the four months to end-April, but down 12.1% in dollars because of the appreciation of the local currency. The cedi has depreciated by more than a third against the dollar since June 30 last year.
Foot traffic dipped 0.7% year on year in Nigeria and Ghana, and the dollar liquidity crisis has held up the sale of Ikeja City Mall in Nigeria.
Most of the company’s gross lettable area is in SA, with more than three-quarters, followed by Eastern Europe, with almost one-fifth, and the rest in SubSaharan Africa. Retail vacancies are down to 1.4% in SA, the lowest since the start of the Covid-19 pandemic, but things are looking up in Eastern Europe.
Hyprop reduced its loan-tovalue (LTV) by 6.5 percentage points to 40.5% in the region, partly because it sold the Delta City Mall in Montenegro for €70m (R1.2bn) in net proceeds. This was used, with other debt repayments, to slash its eurodenominated equity debt by more than 70% to €111m.
“We intend to continue reducing our euro equity debt, recycling assets that do not fit our long-term strategy and securing new growth opportunities,” Wilken said.
The war in Ukraine has had no direct impact on the company, Wilken said, but increasing power and fuel prices might dampen retail and the costs of tenants.
Hyprop announced in February it had acquired Skopje City Mall in North Macedonia, City Centre one East and City Centre one West in Croatia, and The Mall in Bulgaria, for R3.32bn.
Hyprop says it expects to release results for the year to end-June in September.