Hyprop uses roof gardens to lure more shoppers

Hyprop Investments, owner of some of SA’s top-rated shopping centres such as Canal Walk in Cape Town and The Mall of Rosebank, is offering shared workspaces and rooftop gardens as it tries to win back customers in a stagnant economy.

Hyprop got the idea to do so from trends abroad, CEO Morné Wilken said in a pre-close period update.

The idea comes as SA consumers battling high job losses, dangerously high personal debt

– which stands at about 70% of disposable income – and a weak economy make fewer and fewer shopping mall visits.

“I’d seen it in the US. You cannot build gardens and areas that create fresh produce on any shopping centre roof, but the strategy will work at a number of our centres,” Wilken said.

Some other mall landlords have been studying the rooftop garden concept.

Paul Gerard, MD of Flanagan & Gerard, said a garden is being installed on Morningside Shopping Centre with the help of an educational programme run by Red Hill School.

Some vacant stores would be converted into shared office space and Hyprop would also dedicate some of its mall space to showrooms for artisans, Wilken said.

“We are starting at Hyde Park Corner with space for artisans to be able to display their products to people with high levels of disposable income that they haven’t been able to access in the past.”

Wilken said the company is responding to a fall in foot count at its SA malls with a strategy to increase trading density, which he and the rest of the fund’s management had planned throughout 2019.

The company completed a comprehensive study of its malls and aims to optimise tenant numbers as well as improve its internal and external communication.

TRADING DENSITY

Average monthly foot count per square metre in its SA portfolio fell 2.4% in October from the previous year, and was down 2.8% in July.

The group’s retail trading density was up 0.6% for the rolling 12 months to end-June and 1.2% for the rolling 12 months to end-October.

“We know the market is tough, but we do have a plan,” Wilken said.

More details about the strategy will be unveiled over time.

The company retained its distribution guidance for June 2020 of a fall of 10%-13%, owing to the underperformance of its SA and East European property portfolios, as well as reduced rent from the Edcon Group. The retailer negotiated rent cuts as part of a turnaround strategy to keep it in business.

The company has also reduced its dividend payout ratio to 92% of distributable earnings.

Hyprop’s share price closed 3.53% lower at R56.86 on Monday, having fallen 30.23% so far in 2019.

2.4% the drop in average monthly foot count per square metre in Hyprop Investments’ SA portfolio in October