CAPE TOWN – JSE specialist shopping centre Reit Hyprop has sold its stake in Manda Hill Shopping Centre in Lusaka, Zambia, to Growthpoint Investec African Properties (Giap), with the proceeds to be used to cut debt.
The 42000m² mall is owned 50percent by Hyprop Investments (Mauritius) and 50percent by AttAfrica.
The sale was in line with Hyprop’s strategy to reduce exposure to sub-Saharan Africa (SSA), excluding South Africa, to focus on its South African and Eastern European businesses, a statement said yesterday.
At December 2018 Hyprop reported an impairment in the SSA portfolio of R1.07billion (R15.78bn) because, it said at the time, trading conditions in Nigeria, Ghana and Zambia were difficult with low growth, weakening currencies and political instability.
Also, a number of South African retailers had withdrawn from these markets, leading to growing vacancies.
Hyprop chief executive Morné Wilken said Manda Hill sale was concluded at the December 2018 book value. Hyprop would use its share of the proceeds to reduce its dollar denominated debt in Mauritius.
He said the sale was the next step in exiting sub-Saharan Africa, repositioning the South African portfolio and retaining dominance in the Hystead portfolio in Eastern Europe through active asset management.
The disposal would also impact positively on the group’s loan-to-value.
The Manda Hill disposal follows that of Achimota Retail Centre in Ghana in June. Hyprop’s remaining SSA investments, following the Achimota deal, are stakes in Accra Mall and West Hills Mall in Accra, Ghana; Kumasi City Mall in Kumasi, Ghana; and Ikeja City Mall in Lagos, Nigeria.
“Hyprop and the shareholders of AttAfrica intend to further reduce the exposure to SSA over time,” said Wilken.
Hyprop’s share closed on Friday at R67.60, but was trading slightly lower at R66.36 yesterday, after midday. It closed at R65.97.
Giap, the pan-African business managed by Growthpoint Investec African Property Management, said it bought 100percent of Manda Hill Shopping Centre as part of a strategy to aggregate a portfolio of “prime income-producing commercial assets in select cities across Africa.”
It followed Giap’s recent acquisition of Achimota Retail Centre in Ghana. Giap said yesterday that the more than 120 retailers at Manda Hill comprise tenants such as Shoprite, Game, Woolworths, Ackermans and Mr Price.
Giap said further acquisitions would be announced in due course.
Last year, Giap secured capital commitments of more than $212million from several large institutional and international investors.
“Given the pipeline of assets under discussion, Giap’s capital is expected to be fully invested by the end of 2019, with property investments focused on the office and retail sectors.”
Thomas Reilly, the managing director of Growthpoint Investec African Property Management, said Manda Hill was widely regarded as a “benchmark” asset in the industry, and “we believe (it) is considered to be one of the top-performing retail assets on the African continent”.
“We are excited to again take advantage of a highly attractive entry-point into another key city which we believe has the potential to offer strong growth prospects,” he said.