Shopping centre-focused real estate investment trust Hyprop Investments continues to make progress on key priorities having been set for the 2024 financial year ending June 30, including operational improvements.

The company advises in a pre-close operational update issued on June 24 that in the five months ended May 31, the company started implementing its acquisition of Table Bay Mall, which increases the group’s exposure and footprint in the Western Cape.

Hyprop explains that it has completed on-boarding of the property management team and systems at Table Bay Mall, with the company focusing on immediate quick wins such as installing solar and full back-up power, filling vacancies, improving parking income and optimising the tenant mix.

The company also garnered internal approvals to expand the Somerset Mall by an additional 5 400 m² of gross leasable area in the period under review. The additional space will improve the flow of the mall, right-size some tenants, introduce new affordable luxury and athleisure brands and create a new food court.

Hyprop reports that all its portfolios are showing improvements in key trading metrics, owing to a repositioning strategy the company has in South Africa, a good tenant mix and increased footfall across the South Africa and Eastern Europe portfolios.

As part of an improved asset management programme, Hyprop continues to progress the disposal of investments in sub-Saharan Africa.

In the five months ended May 31, the South African portfolio’s foot count increased by 5.7% to 32.48-million, compared with the same months of last year while tenant turnover increased by 2.1% year-on-year to R9.7-billion.

Hyprop’s vacancy rate in South Africa was 1.7% as of May 31, with several refurbishments, relocations and new store openings progressing.

The company comments that while there has been a reduction in loadshedding, it remains a concern, as does the security of potable water supplies at its Gauteng centres, given the deterioration in municipal infrastructure in the province.

All of the company’s centres continued to trade during loadshedding with full back-up power at all sites, except at Table Bay Mall, which will complete installation of new generators in September.

Initiatives to maintain four days’ supply of potable water for the Gauteng malls are under way.

The Eastern Europe portfolio, which includes shopping centres in Bulgaria, Croatia and North Macedonia, recorded a foot fall increase of 0.5% to 8.6-million in the five months under review, while there was an 8.7% increase year-on-year in tenant turnover to €180-million.

The sub-Saharan Africa portfolio continues to be impacted on by a significant devaluation of the naira, in Nigeria, with the local currency depreciating from N950:$1 in January to N1 200:$1 in May.

In April, inflation in Nigeria peaked at 33.7%, which places severe pressure on Nigerian retailers and consumers.

In Ghana, the local currently also depreciated, but key trading metrics of the assets in cedi terms reflected growth in the period under review.

Hyprop is focusing on protecting the value of its sub-Saharan Africa centres by managing the impact of Ghana and Nigeria’s difficult economic conditions.

Hyprop has signed a letter of intent with a company for the sale of the entire sub-Saharan Africa portfolio and will provide further information in due course.

The group’s balance sheet remains healthy despite having acquired Table Bay Mall from cash reserves for R500-million in the period under review.

Following the acquisition of Table Bay Mall, the group’s loan-to-value ratio increased to 40.2% from 37.4% in December 2023. The group’s interest rate exposure is currently 85% hedged.

The company will publish its 2024 financial year results in September.