At a Glance
- Hyprop disposes 50% Hyde Park Corner to focus on regional retail and debt reduction.
- $44 million sale funds debt repayment, upgrades, solar projects, and core investments.
- Deal includes income guarantees, co-ownership, and future purchase options for Millennium.
Hyprop Investments, the Johannesburg-listed retail-focused REIT led by CEO Morne Wilken, has signed a binding agreement to dispose of a 50 percent undivided share in Hyde Park Corner Shopping Centre in Johannesburg to MEP SPV 3, a subsidiary of Millennium Equity Partners, for R805 million ($44 million).
The transaction marks a significant milestone in Hyprop’s strategy to streamline its portfolio, reduce debt, and reallocate capital toward higher-growth regions, including the Western Cape and Eastern Europe.
Transaction aligned with portfolio shift away from mid-sized malls
Hyprop said the disposal is consistent with its plan to exit mid-sized retail assets in favor of regional shopping centers in core economic nodes. Proceeds from the sale will fund debt repayment, asset upgrades, solar PV projects, and new investments within existing operations.
The sale price aligns with the December 2024 independent valuation and will be adjusted based on net operating income performance between July 2026 and June 2027, capped at an 8.75 percent yield. A further escalation of 0.53 percent per month will apply if the transfer extends beyond July 2025.
Income guarantee protects buyer as co-ownership structure established
As part of the transaction, Hyprop has granted an income guarantee covering potential shortfalls in net operating income—capped at R20 million per year over two years.
The shopping center, spanning over 38,000 square meters of gross lettable area, will continue to be asset-managed by Hyprop and property-managed by JHI.
Upon completion, Hyprop and Millennium will become co-owners under a detailed co-ownership agreement. The contract also includes a put and call option allowing Millennium to acquire the remaining 50 percent stake in late 2027 at a price escalating monthly from September 2027.
Capital recycling supports balance sheet resilience
The transaction comes as Hyprop prioritizes strengthening its balance sheet and navigating persistent macroeconomic headwinds across the South African retail sector.
The company with a market value of R17.2 billion ($972.55 million) reported net assets of R1.58 billion ($86.6 million) and profits of R46.5 million ($2.5 million) attributable to Hyde Park Corner as of December 2024.
The disposal, classified as a category 2 transaction under JSE rules, does not require shareholder approval and is subject to regulatory clearances and bank guarantees securing payment of the purchase consideration.
Hyprop’s move underscores a broader industry trend of capital recycling and defensive positioning amid shifting consumer patterns and rising operating costs in the South African property landscape.
