HYPROP

COMPANY PROFILE

2013

Hyprop’s investment in Rosebank

Hyprop’s investment in RosebankHyprop is the largest listed shopping centre fund in South Africa. The

company manages 11 of the country’s largest, premium quality shopping

centres and has a diverse tenant base across the nation. After taking control

of the Attfund portfolio (discussed in our June 2012 edition) the company

is now looking for further growth. With major investments underway, we

speak to the CEO to find out what the future holds for Hyprop.

Editorial – Joe Forshaw

Production – Lauren Grey

Cape Gate Shopping Centre

COMPANY REPORT

PAGE 2 MAR 13

Stoneridge Centre

Rosebank Mall Redevelopment Jan 2013

HYPROP

MAR 13 PAGE 3

In South Africa people love to shop. The shopping scene in the major cities in second to none on the continent and all over the country there are outlets, ranging from small to supersize, that sell everything a modern consumer could possibly desire.

Even in the countryside, away from the hustle and bustle of the central business districts (CBD), shopping thrives with small outlets run by farmers, rural trade markets and single-store boutiques contributing the country’s retail spend.

The country’s large shopping malls (of which there are many) are now the go to places to shop, ironically because their overall offering is more than just stores. Shopping malls now host a range of events including: Celebrity appearances, exhibitions, trade shows, musical performances, theatre productions and art exhibitions.

The popularity of major shopping centres is reflected in

the country’s on-going retail sales growth, even through the tough economic climate of the past few years.

With over 800,000m² of lettable retail area, across 11 of the country’s premier shopping centres, one of South Africa’s leading property investment organisations is Hyprop. The expert property management company has seen the fruits from continued spending in the retail sector and tenants in the shopping centres have seen the fruits from booming online and in-store sales.

Hyprop owns and manages 11 malls and splits them into four categories: Super regional (Canal Walk), Large regional (Clearwater Mall, CapeGate Retail Precinct, The Glen, Woodlands Boulevard), Regional (Hydepark Corner, Rosebank Mall) and Value/Lifestyle (Atterbury Value Mart, Willowbridge, Stoneridge, Somerset Value Mart).

ROSEBANK MALLWhen we looked at the business in 2012, the company

was preparing for its acquisition of the Attfund Retail portfolio and it was clear that Hyprop planned to invest in improvements of its new and existing assets. Those plans came to fruition in August of that year as the company began major upgrades of the Rosebank Mall.

R920 million will be spent on redeveloping the mall, giving shoppers a refreshed and modernised retail facility. The mall will increase in size to 62,000m², almost doubling the available floor space. In addition to adding substantial new retail space the centre will be completely refurbished with new lifts, escalators, ablutions, floor tiles, ceilings, lighting and shop fronts.

When the development is complete, the mall will boast around 160 stores making it the shopping hub of the busy Rosebank node.

The success of Hyprop is partly down to the thriving retail environment in the country right now and developments at the Rosebank Mall will look to add to the prosperous market.

“Supporting local brands is key to Hyprop’s tenant-mix strategy for Rosebank Mall,” says Hyprop’s CEO Pieter Prinsloo. “The right blend of global brands and popular local retailers will ensure that the mall caters to a wide range of shoppers, increasing its reach and appeal.”

He also notes that the development is in line with the company’s ambition to grow its current portfolio saying: “Rosebank is an integrated urban environment offering visitors a unique ‘live, work, play’ experience. We are confident that the new Rosebank Mall will leverage this to realise major benefits for tenants and shoppers, as well as Hyprop’s unit-holders, in line with our strategy of growing existing investments.”

Wilson Bayly Holmes - Ovcon Limited 53 Andries street, Wynberg, Sandton P.O. Box 531 Bergvlei 2012. South Africa

Tel: +27 11 321 7200 Fax: +27 11 887 4364 (e) wbho@wbho.co.za (w) www.wbho.co.za

WBHO is proud to be associated with Hyprop on The Rosebank Mall Project

R E L Y O N O U R A B I L I T Y

COMPANY REPORT

The project is set to reach completion in September 2014 and new tenants will include international brands such as Pringle, Ben Sherman, Kurt Geiger, Earthchild, Woolworths Platinum, Edgars, Dis-Chem, Mr Price Sports and Jet.

The mall will remain open during construction allowing existing retailers including Stuttafords, Truworths, Mr Price, Queenspark and Foschini to operate without slowdowns or breaks in income.

“Construction is being carried out in a phased process and is progressing well,” says Mr Prinsloo.

“90% of the lettable area has already been taken up in committed leases.”

“The right blend of global brands and popular local retailers will ensure that the mall caters to a wide range of shoppers, increasing its reach and appeal,”

“There is upbeat demand for new and extra space at Canal Walk.”

Proud to be associated with Hyprop Investments Limited

CANAL WALKAnother indication of the success at Hyprop is the

fantastic level of customer retention. At the Canal Walk shopping centre, located in Century City, between Cape Town and Belville, CEO Gavin Wood says that tenant retention is a sign of business confidence in the continents leading super regional retail outlet.

“There is upbeat demand for new and extra space at Canal Walk. While our positive trading performance drives retail demand, businesses choose offices at Canal Walk to be centrally located, secure and benefit from unparalleled access to retail, banking and parking.”

The shopping centre is the now one of the most sought after business locations, for retail and office space, in the country.

Described by the company as ‘the jewel in the crown of JSE listed property heavyweight Hyprop Investments Limited’s portfolio’, Canal Walk, much like Rosebank, is not finding it difficult to attract standout tenants.

Its dominant presence attracts diverse shoppers from an extensive portion of the Western Cape, and further afield, with its comprehensive retail and leisure options of 400 shops, services and restaurants. Blue-chip

companies occupy office space in the two eight-storey prime office directly above the mall, with spectacular views of Table Mountain and Robben Island and easy access from the N1.

In the last year stores including; Superga, Steve Madden, Fielli, Typo, Entrepo, H.O.M, Hugo Boss, Boardriders and XOXO have all taken occupancy in Canal Walk – a testament to the vision of Hyprop, a vision which sees the company intending to be the frontrunner for investment in South Africa, offering the distinct opportunity to access income and capital growth through a specialist portfolio of high quality, high performance shopping centres in a simple, sustainable investment vehicle.

With R20.6 billion in total assets, Hyprop remains positioned as the premier property investment organisation in South Africa. With shopping centres now categorised as one of the most defensive real estate asset classes and the nation proving its financial systems to be some of the strongest in the world, Hyprop is ideally placed to ensure continued growth in the value of all its assets from super regional shopping centres to office parks.

Hydepark Shopping Centre

PAGE 6 MAR 13

COMPANY REPORT HYPROP

tel:

fax:

mob:

web:

+27 11 463 9673

+27 11 463 9675

+0861 112 622

www.intellepark.co.za

Block C

57 Wessels RdRivoniaSouth Africa2128

We are celebrating its our10th year in the South Africanparking industry this year.

Intellepark celebrates its 10th anniversary

Intellepark celebrates its 10th year in the South African parking industry this year, following its success in winning one of the Circontrol Group’s Smart Cities awards in October last year for its Pavillion Parking Guidance Project.

Intellepark Managing Director, Sheldon James, founded the company in February 2003 with Theo Christodoulou; six month’s later Tim Reynolds, Director in Charge of Sales & Projects, joined Intellepark and since then the company has grown at an unprecedented rate, increasing its market footprint to become one of the most instantly recognisable parking brands in the country.

Intellepark’s Johannesburg o�ce moves to Rivonia Formerly located

Road, Rivonia. Intellepark started out 10 years ago with a small premises in Peter Place, Bryanston, which was only about 120m2

and Durban were subsequently opened 2005 and 2006 respectively. We outgrew Johannesburg premises in just two years and, after several years at Belgrave House, also in Bryanston, we are now settled in the new building and employ 80 people.”

Training o�ered at Intellepark’s new Johannesburg o�ce.As there is an on-going need to train new operators and

was included so that training can take place in a less pressurised environment.

A full demo facility is available on the ground level of the

Existing customers, prospective customers and trainees are able to view and operate our products. Not only does this assist tremendously during training but allows existing and prospective customers the ability to experience new

Our product and business strategy is taking new complimentary technologies to our existing customer data-base as well as supplying existing technologies to new markets, like the African market.

Some of Intellepark’s projects completed in Africa include:

• Pay On Exit System - Nigeia, Kenneth Kaunda International Airport

• Central Payment System - Ikeja City Mall in Lagos, Nigeria

• Two central cashier sites in Harare, Zimbabwe• Pay On Foot Systems - Hilton Hotel, Windhoek,

The Glen

PAGE 8 MAR 13

COMPANY REPORT

DISTRIBUTION GROWTHHyprop reported in February that distributions had

risen by 6.8% at the end of 2012, to 409 cents per unit. Total return to unitholders was 44.8% supported by a 37% growth in market capitalisation to R17.7 billion. Investments in Africa and of course, the Rosebank project were catalysts for the rise.

“Over the past 25 years Hyprop has consistently delivered sustainable income and capital growth, and in our quarter century anniversary year has again demonstrated solid growth,” says Mr Prinsloo.

“Some progress was also made in reducing vacancies in the office portfolio, despite a far tougher commercial market. Total vacancies overall decreased to 2.5% from 3.9%,” says Mr Prinsloo.

Effective cost control improved the overall cost to income ratio to 35.4% from 37.5% in December 2011, while total arrears reduced from R41.3 million in the previous year to R19.8 million.

Taking into account the short-term dilution effect of the Rosebank Mall development, Hyprop expects distribution growth of 5% to 7% for the year ahead

to December 2013, something which investors will be happy to hear.

Investment in Africa, including the acquisition of a stake in Atterbury Africa has marked Hyprop’s entry into continental markets.

“The emerging economies in Africa offer us promising opportunities to expand on quality existing centres and to develop our own in these fast-growing regions,” says Mr Prinsloo.

Opportunities on the continent are now forming a more significant part of the Hyprop strategy.

Mr Prinsloo says: “Our focus remains on investment in dominant shopping centres both locally and across Africa, while continuing to dispose of any remaining non-core assets if the opportunity arises.”

One of the most encouraging figures released by the company recently showed that total arrears were down, reduced from R41.3 million in the previous year to R19.8 million at the end of 2012, demonstrating successful management, even during what is one of the most challenging periods in the economic climate in recent history. .

HYPROP

Tekweni Centurion Ceilings

celebrating 26 years of

successful trading as a favourite

subcontractor to all major

building contractors throughout

South Africa and Botswana.

Specialising in ceiling and partition requirements, internal and external.

Most recent achievements and completed projects include:

Lynwood Bridge – Won St Gobain’s National ceiling award and represented South 1. Africa in the 8th St Gobain’s International ceiling awards.King Shaka international airport2. OR Tambo airport3. Lynwood Bridge shopping centre4. Alexander forbes building5. Various shopping centres and office blocks6.

Currently contracted to do mall ceilings in the refurbishment and additions to mall of Rosebank and 102 Rivonia Road Sandton.

Commitment and passion is our recipe for success.

Johannesburg

011 708 0934

Durban

031 569 2796

(0)1603 618 000

info@industrysa.com

East Coast Promotions Ltd, Ferndale Business Centre, 1 Exeter Street.Norwich, NorfolkNR2 4QB

+27 11 447 0090www.hyprop.co.za