Hyprop Investments (HYP) Trading update summary

Executive summary

• Operational update covers January to May 2025, highlighting strong performance and strategic milestones in South Africa and Eastern Europe portfolios.

• Key priorities include portfolio repositioning, asset recycling, balance sheet strengthening, and simplification since 2019.

• Major events include the Hystead liquidity event, acquisition of core Eastern Europe centers, and sale of non-core assets.

• Ongoing MAS transaction could be a significant strategic move, subject to shareholder approval and due diligence, supporting expansion into Romania and Poland.

• Increased exposure in Western Cape and completed key redevelopment projects in both regions.

Trading performance and revenue trends

• Tenant turnover and trading densities rose in both SA and EE, with SA turnover up 7% and trading density up 10.2% year-on-year; EE turnover up 6.4% and trading density up 4%.

• SA collections averaged over R320m monthly for 17 months to May 2025, with collection rates at 101%; EE collections averaged €8.2m monthly at 105%.

• Retail vacancies in SA at 3.9% (mainly due to right-sizing and Edgars downsizing), below market norms; EE vacancies at 0.1%.

• Positive leasing activity and new store openings across major malls in both regions.

• Positive rent reversions, with new retail deals up 13.5% and office rent reversions at 10.2%.

Profitability and margins

• Effort ratio in South Africa reduced to 8.2% from 11.3% in June 2020.

• Weighted average reversion rate in SA positive at 2.9%, with new deal reversion rate at 13.5%.

• Group funding costs expected to decline by 0.4%-0.6% in 2026 due to lower margins and interest rates.

• Solar and battery projects deliver double-digit returns, with solar yields around 20%.

• Increased dividend payout ratio: interim at 95% (up from 90%) and total annual at 80% (up from 75%) of distributable income.