Press Releases

HYPROP'S THE GLEN SHOPPING CENTRE IN R370 MILLION EXPANSION - 08 July 2009

Brisk trade at The Glen Shopping Centre ("The Glen"), an asset in the portfolio of leading listed retail property fund Hyprop Investments ("Hyprop"), is driving an expansion project valued at R370 million. Planned extensions to the centre will increase the current 55 000m² by an additional 19 000m² of retail space and 1 100 new parking bays. Incorporating the malls to the new shops, driveways and ramps to the parking, the new multi storey concrete structure will be approximately 68 000 m². The project will further include measures to improve traffic flows accessing the centre. The Glen is 75.15% owned by Hyprop with the balance owned by Ellerine Bros..

Hyprop CEO Pieter Prinsloo says the new developments at The Glen are in line with the group's strategy to focus on asset enhancing opportunities in its existing portfolio. "The Glen enjoys a growing and increasingly sophisticated market. By continually strengthening the tenant mix, Hyprop strives to improve the retail experience for The Glen's shoppers and so boost turnover at the centre and continue Hyprop's growth."

The Glen's General Manager Roy Licht says: "Market research by a number of 'brand' stores and national anchor tenants has indicated a need for retailers to be represented at The Glen, the upmarket shopping location in the south of Johannesburg." He says new tenants will therefore include 'brand' stores such as Guess, Hush Puppies, Esprit, Nine West, Exclusive Books and Coricraft which will cater to customer aspirations in the area.

The new extension will be anchored by a 4 000m² Game store, joined by 'super lifestyle' retailers Dischem, Wetherlys and Incredible Connection which will each occupy 1 800m² of floor space. Current tenants Foschini@Home and Mr Price Home will be expanding to 1 800m² and 2 400m² respectively.

Located adjacent to the N12 freeway and in close proximity to the upmarket residential areas of Glenvista and Mulbarton, the centre caters to a growing and increasing affluent market. Licht says: "The primary catchment area for The Glen comprises over 50 000 surrounding households in 'the new south'. The area has seen significant growth in standard of living and population. Over the past few years alone, up to 4 000 new luxury homes have been built. From being an historically less affluent area, today at least 50% of local residents fall into the LSM 8-10 category". He adds: "Significant development of good housing, quality government and private schools and 60 000m² of zoned office sites surrounding The Glen should prove a strong attraction away from the traffic-congested northern suburbs of Johannesburg."

The current expansion project will cover more than just the shopping centre with immediate surrounding environs also set to benefit. Improved access points will include a double lane from the nearby Comaro Road offramp, with an added lay-by lane to facilitate east traffic flow into the centre. Further, an innovative electricity arrangement with the local council will see cables from underutilised substations being diverted to the centre, which will in turn release capacity back into the hard-pressed Mulbarton grid.

Licht says an economic down cycle is the ideal time for expansion - to prepare the platform for growth in the inevitable recovery and subsequent up cycle. He adds that current escalating inflation and prevailing negative economic sentiment are causing shoppers to shop more selectively.

The latest expansion follows renovation projects that have seen a 2 200m² expansion of Edgars, extension of the banking area and upgrade of the centre's restaurants.

Licht says the centre records an average footcount of one million people a month, with the stores generating a monthly turnover of over R100 million. "This almost doubles over Christmas as the area has a different spend pattern to the northern suburbs of Johannesburg. Here, people take shorter holidays and spend the balance with their families at home."

Similar expansion projects are also underway or nearing completion at a number of Hyprop's other shopping centres. At Southcoast Mall in KwaZulu-Natal extensions have just been completed which increased the mall from 28 173m2 to 29 357m2. Valued at R10,8 million, these include a new 1 337m2 Mr Price Home Store and follow last year's 1 000m² extension to Boardmans at a cost of R6 million.

Flagship centre Canal Walk has seen the recent development of new premises for a 3 500m2 Mr Price Home store and a 1 600 m2 Sportsmans Warehouse. Further developments in the pipeline include a 1 400m² expansion to Woolworths and 16 000m² additional retail space, while plans to enlarge the food court are ongoing.

The group also recently announced the development of an upmarket four-star hotel adjacent to Hyde Park Shopping Centre at a total cost of R180 million. The hotel will be developed together with Southern Sun who will manage it on opening, anticipated to be in June 2009.

Prinsloo concludes: "Hyprop will continue to pursue organic growth opportunities by retaining focus on prime retail developments in strategic locations with good demographics. We see strategic expansion projects as key to unlocking value in our existing centres and positioning the group for growth in challenging market conditions. Maintaining growth in the portfolio with consistent quality assets will be crucial to generating continued growth in distributions to unitholders."

HYPROP APPOINTS NEW CEO TO TAKE EXPANSION FORWARD - 22 June 2009

Leading listed retail property fund Hyprop Investments ("Hyprop") today announced the appointment of Mike Rodel as CEO with effect from 1 August 2009. Rodel, a former Regional General Manager for Old Mutual Property Investments, will now oversee the completion of Hyprop's R663 million expansion programme launched in 2008. The new developments remain well on schedule for completion later this year and are set to enhance Hyprop's portfolio of quality shopping centres with additional retail space, an improved tenant mix and increased parking facilities.

Hyprop executives Laurence Cohen (Financial Director) and Nicole Greenstone (Group Asset Manager) jointly took over the reigns of the R9.4 billion portfolio when former CEO Pieter Prinsloo resigned earlier this year. Hyprop Chairman Michael Aitken says the group is pleased to welcome Mike Rodel to the board and believes his extensive retail property management and development experience will strongly complement the team. Rodel holds a BSc (Civil Engineering) and has more than 17 years' experience in the property industry. Having spent eight years at Liberty Life Properties, he joined Old Mutual Investment Group (Property Investments) as General Manager of Gateway shopping centre in Durban in 2000 before being appointed Regional General Manager of KwaZulu-Natal and Eastern Cape in 2006.

Commenting on Hyprop's latest developments, Financial Director Laurence Cohen says the expansion programme will entrench the relevant shopping centres' dominance in their respective nodes. "The upgrades and new additions at Canal Walk in the Western Cape and The Glen, south of Johannesburg, will go a long way towards increasing footcount and boosting turnover at these centres."

In May 2009 Foschini @home Living Space, the first of six free-standing retail 'pods', opened its doors with the remainder nearing completion and due to open between June and September this year. The 'pods' will add 15 500m² of retail space to Canal Walk specifically for destination retailers whose offerings are ideally suited to large trading floors. This will see the centre's retail offering increasing to over 141 000m2 in gross lettable area ("GLA"), making it one of the largest super regional shopping centres in the country.

In addition to Foschini @home Living Space, the new stores will house retailers Bride & Co, Cape Union Mart, Golfer's Club, Hi-Fi Corporation, Sports Direct and Urban Living. Cohen points out that Foschini @home Living Space and Cape Union Mart are both flagship stores for the respective chains, with the latter being the largest of its kind in Africa. "Cape Union Mart will take advantage of the extensive floor space and volume to offer an interactive experience including climbing walls and simulated temperature chambers."

The two-storey 'pods' constructed close to Canal Walk's main centre are ideally positioned for greater accessibility and convenience. 1 000 new parking bays are being added to accommodate shoppers.

Cohen says: "The new stores have been designed using substantial glass cladding to maximize the clear visibility from the N1 highway." He adds that they stand to benefit from the ongoing development in the high growth Century City precinct. A new Bus Rapid Transit ("BRT") station will open on Canal Walk's doorstep in May 2010 to service the strong commercial development in the area. Major office parks have been built and leading corporates are relocating to Century City. The new stores represent a R206 million investment by Hyprop with an expected initial yield of 8,9%.

The Glen's R278 million expansion programme is also on track to take the centre over 75 000m², making it one of the largest regional shopping centres in the area. Cohen says the expansion will significantly improve the tenant mix at The Glen, providing a comprehensive variety of retailers for a 'one-stop' shopping experience not previously available in the south of Johannesburg. The additional 19 000m² of retail space will include new anchor tenants such as Game and Dischem, together with 'super lifestyle' retailers Wetherlys, Hi-Fi Corporation, Foschini @Home and Incredible Connection. The new development will open on a phased basis from September to November 2009. More than 1 000 new parking bays will also be added.

Cohen says a new R500 million facility from Standard Bank, secured earlier this year at a favourable interest rate of 9.4% and fixed for five years, has ensured continued funding for the developments. He says expansion of and investment in the existing portfolio is crucial to generating continued growth in distributions to unitholders, and adds: "Hyprop is well-positioned with quality assets in high growth nodes to benefit from a likely economic turnaround in the years ahead."

The group's sixth and newest centre - Stoneridge Centre in Greenstone Park, Modderfontein - opened in September 2008 adding 50 000m² of retail space to the portfolio. The R571 million lifestyle mall is anchored by a Spar Supermarket, a Fruit & Veg Food Lover's Market, Sportsman's Warehouse, Toys R Us and a Virgin Active Gym. Cohen says the centre has had a challenging start. "It is not uncommon for a new centre to take two to three years to establish itself. Stoneridge opened at the start of the economic downturn, which negatively impacted demand for retail space. Surrounding residential and commercial developments have also experienced a challenging start."

However, he says the dynamics of the Greenstone/Modderfontein node are anticipated to improve substantially as the surrounding developments become fully tenanted. Cohen adds that approval has been obtained for the construction of a direct access link to the centre off Modderfontein Road, which will give a further boost to prospects for Stoneridge Centre.