According to Hyprop, their performace was udnerpinned by positive rental growth, reduction in interest costs and improved operating efficiencies.
“Notwithstanding a challenging economic environment, our centres performed well.” said Pieter Prinsloo, Chief Executive Officer of Hyprop in a statement released on Thursday.
The fund changed its year end to June 30 in order to facilitate its recent conversion to a Real Estate Investment Trust (REIT) in July 2013.
"In due course Hyprop will implement a capital restructure to simplify its capital structure and ensure compliance with legislation," said the statement.
The rental income earned by Hyprop [DATA HYP:HYPROP INVESTMENTS LIMITED.] for the year end (less property expenses and interest on debt) is distributed to unit holders semi-annually.
Hyprop received its first divdend of 1.4 million rand from its 37.5 per cent shareholding in Atterbury Africa, which has been making significant progress in developing quality shopping centres in the rest of Africa.
The company has a stake in the 19,000 square meter Accra Mall in Ghana and also has development projects planned for the 26,500 square meter West Hills Mall in Accra.
“Our primary objective is to provide sustainable income growth and capital appreciation to investors,” said Prinsloo.
Hyprop, which is the largest specialised shopping centre fund in the country, currently owns 11 shopping centres such as Clearwater mall, Hyde Park Corner, Rosebank mall and Canal walk.
Distributable earnings from shopping centres grew by 7.2 per cent with strong performances from the fund’s shopping malls such as Canal Walk in Cape Town up by 10.2 per cent and Hyde Park in Johannesburg at 10.9 per cent.
Hyprop also acquired Somerset Mall in Cape Town in exchange for 81,5 million Sycom units in a transaction valued at R2,3 billion. The income-for-income swap is not expected to have any dilutionary effect on distributions.
“Somerset Mall is a high quality 66 000m² regional shopping centre, and an elegant fit with our existing portfolio.” explained Prinsloo.
They also have planned vacancies at Rosebank mall due to the redevelopment project that the property is currently undergoing.
"Taking into account the short-term dilutioin effect of the Rosebank Mall redevelopment, we expect distribution growth of 6.5 per cent to 8.5 per cent for the year end to June 2014," said Prinsloo.
The project is expected to reach completion in September 2014.
On the other hand, income from listed property securities reduced due to the disposal of the fund’s investments in Vunani Securities Proprietary Limited and Acucap Properties in 2012, which totalled 524 million rand
Hyprop has stated that they will continue growing the fund through acquisitions of dominant shopping centres and further shopping developments in Africa. The company expects distribution growth to be between 6.5 to 8.5 per cent for 2014.