Hyprop (HYP) is a leading property real estate investment trust (REIT) that specialises in high-quality shopping malls in South Africa and has some interests in Eastern Europe and Africa to the north. It owns some of South Africa's best-known shopping malls like Rosebank, Canal Walk, Hyde Park, and Clearwater. It has been impacted to some extent by the fall-off in consumer spending through lower trading densities. This share is currently trading at close to half of its net asset value (NAV) of R63.39 - which in our view makes it a good buy.
The new CEO, Morne Wilken, is intent on building rooftop gardens and offering shared workspaces to lure customers back to its shopping malls. In its results for the six months to 31st December 2023, the company reported a loan-to-value (LTV) of 37.4% and headline earnings per share (HEPS) of 111.3c compared with 226.1c in the previous period. The company said, "The SA portfolio's tenant turnover increased by 5.6%, while trading density grew by 4.9%, and average monthly foot count increased to 7 million, reflecting a 5.8% increase year-on-year. Retail vacancies for the SA portfolio were well controlled at 1.3%."
In a pre-close update, the company reported, "Foot count increased 5.7% compared to the prior comparable period and tenant turnover increased by 2.1%. The vacancy rate was 1.7% (1.9% including Table Bay Mall) at 31 May 2024."
Technically, the share found support at 2562c in November 2023 and has been rising ever since although the recent results were a setback as well as its exposure to Pick 'n Pay stores. Pick 'n Pay stores are anchor tenants in all Hyprop shopping malls - so the likelihood that Pick 'n Pay may close as many as 40 of its underperforming stores is a major concern. Despite this, Hyprop is trading at below half of its NAV and on a P:E of 10.9. We see it as a potential buying opportunity.
The new CEO, Morne Wilken, is intent on building rooftop gardens and offering shared workspaces to lure customers back to its shopping malls. In its results for the six months to 31st December 2023, the company reported a loan-to-value (LTV) of 37.4% and headline earnings per share (HEPS) of 111.3c compared with 226.1c in the previous period. The company said, "The SA portfolio's tenant turnover increased by 5.6%, while trading density grew by 4.9%, and average monthly foot count increased to 7 million, reflecting a 5.8% increase year-on-year. Retail vacancies for the SA portfolio were well controlled at 1.3%."
In a pre-close update, the company reported, "Foot count increased 5.7% compared to the prior comparable period and tenant turnover increased by 2.1%. The vacancy rate was 1.7% (1.9% including Table Bay Mall) at 31 May 2024."
Technically, the share found support at 2562c in November 2023 and has been rising ever since although the recent results were a setback as well as its exposure to Pick 'n Pay stores. Pick 'n Pay stores are anchor tenants in all Hyprop shopping malls - so the likelihood that Pick 'n Pay may close as many as 40 of its underperforming stores is a major concern. Despite this, Hyprop is trading at below half of its NAV and on a P:E of 10.9. We see it as a potential buying opportunity.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.