Hyprop Investments has announced that it will declare an interim dividend of 105c-115c per share for the six months to end-December 2024 after skipping it last year.
The board’s decision, announced on Tuesday, comes after the company withheld its interim dividend for the 2024 financial year due to heightened risk. However, in its annual results, Hyprop said “several of these risks have been mitigated or reduced”, including through the sale of its Sub-Saharan African portfolio to Lango.
It declared a full-year dividend of 280c a share in September, totalling more than R1bn.
The group which owns nine shopping centres including Rosebank Mall, Hyde Park Corner and The Glen in Johannesburg and Canal Walk and Cape Gate in Cape Town has faced several challenges over the past five years that led to a decline in investor confidence and its share price.
The Financial Mail previously reported that the group struggled with complicated African and East European ownership structures, high levels of debt, underperforming retail assets, and an inconsistent dividend policy.
Its Sub-Saharan Africa portfolio, comprising malls in Ghana and Nigeria, was particularly problematic due to poor trading performance and local currency volatility, resulting in large valuation writedowns and burdensome dollar-denominated debt.
The Covid-19 pandemic dealt a blow to Hyprop as trading restrictions and rental relief for tenants negatively affected income. Rising interest rates worsened the situation further by increasing debt servicing costs and reducing consumer spending at its malls. Hyprop also grappled with legacy issues in Eastern Europe, where its malls were co-owned through complex structures that added to operational inefficiencies.
In SA, a focus on short-term rental growth over reinvestment led to underinvestment in mall upgrades, which affected the long-term competitiveness and relevance of its retail centres. These issues created a prolonged period of underperformance for Hyprop, requiring an extensive five-year restructuring under CEO Morné Wilken.
The company is due to release its interims results on March 13.
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