JSE-listed real estate investment trust (Reit) Hyprop Investments has delivered strong interim results for the six months ended December 31, 2025, reporting a 12.9% increase in distributable income.

The board declared an interim dividend of 119c a share, up 4.9% from the prior period and affirmed its full-year guidance of a 10% to 12% increase in distributable income per share.

Hyprop owns, manages and redevelops retail centres in prominent, mixed-use precincts strategically located in key economic nodes.

The company notes that it is expanding its presence in preferred regions, such as the Western Cape and Eastern Europe (EE), while strategically optimising its Gauteng assets to maximise sustainable, long-term value for stakeholders.

In February, Hyprop sold a 50% stake in the Woodlands shopping centre, in Gauteng, as part of its strategic objective to reduce its exposure in the province, recycle capital for new and organic growth opportunities and participate in further upside from the centre as the majority shareholder.

“Both our South African and Eastern European portfolios continue to deliver inflation-beating results, underscoring the success of our repositioning strategy. We are now seeing the benefits of the strategic steps we have taken since 2019.

“Key milestones include reducing the group loan-to-value (LTV) to 31%; acquiring the four core EE centres; disposal of the sub-Saharan African portfolio; acquisition of Table Bay Mall, which is delivering significant growth; and the recent 50% sale of Woodlands, which has positioned us to pursue further earnings-enhancing and sustainable organic and new growth opportunities,” says CEO Morné Wilken.

KEY FINANCIAL HIGHLIGHTS

Hyprop reports that its distributable income rose by 12.9% year-on-year to R864-million, driven by Hyprop’s focused strategy.

Distributable income per share increased by 5.4% to 212.3c a share as the number of issued shares increased by 7%, following a successful capital raise in December 2025, which was multiple times oversubscribed.

Borrowings reduced to R13.8-billion from R14.7-billion as at June 30, 2025, and the group says it was in a strong liquidity position at as at December 31, 2025, with R949-million of cash and R2.3-billion in available bank facilities.

The company notes that the LTV ratio improved to 31% from 33.6% in June 2025 and will further decrease to 29.6% after the Woodlands transaction is completed.

Hyprop reinvested R265-million in its portfolios during the period.

SOUTH AFRICAN PORTFOLIO

Hyprop explains that trading density in South Africa rose by 7.5% in the six months ended December 31, 2025, significantly above the 4.3% increase in the same period in 2024, and tenants’ turnover rose by 5%, up from 4.8%, while foot count increased by 1.9%.

The company notes that the strong operational performance demonstrates the appeal of Hyprop’s retail centres, which are supported by a resilient living standard measure (LSM) shopper base.

The retail vacancy rate reduced from 4.2% at June 30, 2025, to 3.1%, as most of the rightsizing of anchor tenants has been completed and the reclaimed space is being let to new tenants.

The company notes that particular highlights for Hyprop’s tenant base in this period were the opening of a flagship Incredible store and the first Hisense store in South Africa, both in Canal Walk, in the Western Cape; LEGO and Safari Collection as part of the Somerset Mall Phase 2 expansion; the much-anticipated opening of Checkers FreshX and PetShop Science, at the beginning of August 2025 – which had a positive impact on foot and vehicle counts; and a first-of-its-kind Maison Deux – a luxury department store – at Hyde Park Corner, in Gauteng; and the opening of the first Walmart store in Africa at Clearwater Mall in November 2025 – the centre’s foot count increased by 20.3% in that month.

Hyprop notes that capital expenditure (capex) projects under way in South Africa during period include the Phase 2 expansion and retiling project at Somerset Mall, which is progressing well and scheduled for completion in July; installation of solar PV and energy projects at The Glen and Hyde Park Corner; new parking systems at Canal Walk and Clearwater Mall; and several tenant installations.

The company says there are more projects in the planning stage, including a Phase 3 expansion at Somerset Mall, driven by strong tenant demand.

EASTERN EUROPE PORTFOLIO

Meanwhile, Hyprop reports that its EE portfolio continues to demonstrate resilience and improve its operational performance.

In the six months ended December 31, 2025, the company notes that tenants’ turnover increased by 3.8%, while trading density rose by 3.6%.

The company explains that demand for space remains exceptionally high, with a 0.2% vacancy rate in December 2025.

The company says centres strengthened and balanced their tenant mix by adding unique brands and expanding others.

These included a new tenant for Skopje City Mall, Bagabond, a niche brand specialising in Italian leather bags and accessories, whose store is scheduled to open by March.

In City Center One East, Gligora Cheese & Deli – a cheese producer in Croatia – and dShop – the official fan shop of GNK Dinamo, a Croatian football club – have enhanced the offering.

New tenants that have strengthened the mall’s appeal include ETAM, Office Shoes, ProCredit Bank, Late Café, Just Asia, McDonald’s and Miniso.

The company notes that City Center One East and City Center One West both received General Urban Plan (GUP) approval from the City of Zagreb in September 2025.

Hyprop says City Center One East’s expansion project is now in the final design phase, with the feasibility study currently under way.

Capex for the period was €2-million.

The company explains that the largest project undertaken was the retiling of City Center One West.

SUSTAINABILITY

Additionally, Hyprop notes that the installation of solar PV systems at The Glen, of 3 178 kW, and CapeGate, of 4 991 kW, and a new battery energy storage system at Hyde Park Corner, has begun.

Hyprop says it is in the process of securing local authority approvals for the solar PV plants at Canal Walk and Somerset Mall, noting that it recently obtained approval to install solar PV plants at City Center One East and City Center One West, in Croatia.

In South Africa, water tanks providing up to five days of backup potable water are planned for Somerset Mall, Table Bay Mall, CapeGate and Canal Walk, and will be ready by June.

At Somerset Mall, 25 waterless urinals and 49 Propelair low-flush-volume toilets have been installed as part of the bathroom upgrades.

The waste recycling rate for the South African portfolio in the six months to December 31, 2025, was 78%.

In late November 2025, Hyprop says it achieved five net-zero-waste certifications: for Canal Walk, CapeGate, Somerset Mall, The Glen and Woodlands.

OUTLOOK

Hyprop notes that the board has decided to raise the dividend payout ratio for the current financial year ending June 30 to 82.5% of distributable income from the South African and EE portfolios, from 80% previously, reflecting continued progress on strategic priorities.

The company says the plan is to increase the payout ratio progressively over time, noting, however, that the board believes the group is approaching the anticipated maximum payout ratio.

“We remain focused on executing our strategy and driving long-term value for our stakeholders through prudent capital allocation, ongoing repositioning of the South African and EE portfolios, implementing sustainable solutions to reduce the impact of infrastructure challenges in South Africa and driving new and organic sustainable growth opportunities.

“With a strong balance sheet and robust demand for our retail spaces, Hyprop is well-positioned to continue delivering superior returns and sustained growth in the long term,” concludes Wilken.