One of Joburg’s biggest shopping malls is in trouble
Hyprop Investments, the owner of Canal Walk, the Rosebank Precinct, and Hyde Park Corner, saw its profits fall for the year ended 30 June 2024.
Despite the knock in profits, the major shopping malls in its portfolio have been performing quite well—except for one.
Across the nine major retail centres in the group’s portfolio, eight saw increased turnover, foot traffic and trading density over the last year.
The one exception is the 85,800 square metre Clearwater Mall on the West Rand of Joburg, which struggled across all those metrics.
According to Hyprop, Clearwater Mall’s performance was hit by various infrastructure challenges during the year, including a sinkhole on one of the main feeder roads to the centre, which impacted foot traffic.
“Factors that contributed to the reductions are the underperformance of anchor tenants, a two-week power failure in November and the closure of Hendrik Potgieter Road to repair a sinkhole.
“The road is now open, the performance of the anchor tenants is being addressed, and foot count has started to improve,” it said.
The table below outlines the performance:
| Mall | Foot Count | Trading Density | Tenant Turnover |
|---|---|---|---|
| Canal Walk | +10.1% | +3.4% | +4.4% |
| Somerset Mall | +0.9% | +4.3% | +6.0% |
| Table Bay Mall | New | +11.6% | +14.2% |
| CapeGate | +14.6% | +5.2% | +6.1% |
| Rosebank Mall | +8.5% | +8.3% | +10.9% |
| Hyde Park Corner | -0.5% | +5.3% | +2.7% |
| The Glen | +0.5% | +0.7% | +1.8% |
| Woodlands Mall | +20.6% | +1.3% | +4.7% |
| Clearwater Mall | -2.5% | -0.2% | -1.1% |
| SA Portfolio | +7.2% | +12.4% | +13.7% |
The group said that the global economy continued to recover in 2024, with several regions in which it operates showing strong resilience amid global challenges, such as conflicts, political uncertainty and consistently high interest rates.
As key economic metrics in many economies have stabilised, the prospects for interest rate cuts are increasing, which should lead to further global growth.
“Post the 2024 elections, South Africa is experiencing a wave of optimism which reflects a belief in South Africa’s potential for growth and transformation in the coming years,” said the group.
“The new government’s promising policies aimed at addressing economic reform, improving infrastructure, enhancing energy security and reducing unemployment are garnering positive attention. “However, the delivery of these policies remains key.”
“While certain challenges appear to be better managed (notably power shortages), others have emerged (service delivery by municipalities and security of water supply), requiring businesses to continue to divert capital away from new/expansionary opportunities to projects to ensure sustainability.”
The group said that its strategy and capital allocation continue to favour areas which are better managed and offer better risk-adjusted returns.
The group’s financials show that its net profit for the year dropped to R755 million (2023: R1,486 million).
The group said that the decrease in net profit was due to impairments in its Sub-Saharan African properties, which it, along with Attacq, is selling.
The group added that the acquisition of Table Bay Mall, which it bought for R1.6 billion, has been included in the results from 1 April 2024.
Notably, distributable income for the year decreased from R1,451 million in 2023 to R1,405 million in 2024, and distributable income per share decreased from 405.2 cents to 370.4 cents.
The better-than-expected decrease in distributable income per share followed a solid operational performance of the South Africa (SA) and Eastern Europe (EE) portfolios and lower-than-expected interest costs.
The group said that the main factors impacting the distributable income per share were:
- The increase in operating income of the SA and EE portfolios from 2023 by 7% and 21%, respectively;
- The increase in interest costs following the expiry of interest rate hedges in July 2023;
- The acquisition of Table Bay Mall;
- The realised foreign exchange losses of R60 million by Gruppo, and
- The effect of an additional 20.8 million shares (equivalent to 5.79% of the number of shares in issue) issued in November 2023 pursuant to the DRIP offered to shareholders with the 2023 dividend.
The group’s basic earnings per share also dropped by 36.5% to 273. cents, while its headline earnings per share declined by 24% to 299.5 cents per share.
The board declared a dividend of 280.0 cents for the year ended 30 June 2024, which was 6.4% lower than the 2023 dividend of 299 cents.
The group’s financials can be found below:
| Financials | FY23 | FY24 | % Change |
| Net operating income (R’000) | 1 229 170 | 1 304 590 | 6.1% |
| Headline earnings per share (cents) | 393.9 | 299.5 | -24% |
| Basic earnings per share (cents) | 431.9 | 274.3 | -36.5% |
| Distributable income per share (cents) | 405.2 | 370.4 | -8.6% |
| Dividend per share (cents) | 299 | 280 | -6.4% |
| Net asset value per share (Rands) | 63.39 | 60.32 | -4.8% |
Read: Major shopping mall in South Africa getting huge upgrade – opening next month
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