Hyprop expands beyond Africa with $139 million Bulgaria mall deal

Hyprop Investment, a South Africa prominent Real Estate Investment Trust (REIT), is accelerating its push beyond Africa after agreeing to acquire Bulgaria’s Galleria Burgas shopping centre in a deal valued at R2.3 billion ($139 million), strengthening its position in Eastern Europe’s retail property market.

The acquisition, executed through Hyprop subsidiary Balkan Retail, involves the purchase of 100% of the shares in Galleria Burgas EAD from MAS Property Holding, a subsidiary of MAS plc. The transaction marks one of Hyprop’s most significant offshore capital deployments in recent years.

Located on Bulgaria’s Black Sea coast, Galleria Burgas is regarded as a dominant regional shopping centre serving one of the country’s key commercial and tourism hubs.

Expansion strategy targets high-growth retail markets

The latest acquisition lifts Eastern Europe’s contribution to Hyprop’s gross asset value to 37%, underscoring management’s growing preference for high-performing retail assets outside South Africa. The company already owns strategic shopping centres across the region, including The Mall, Skopje City Mall, and City Center one East and West.

Hyprop said the transaction will be funded through existing cash reserves, supported by R1.2 billion ($73 million) raised through accelerated bookbuilds earlier this year and proceeds from the partial disposal of Woodlands Boulevard in South Africa.

As part of the agreement, Hyprop will assume approximately €73.3 million ($85 million) in senior debt attached to the asset, while injecting an estimated €53.5 million ($62 million) in equity funding, including working capital adjustments.

Balance sheet remains within target range

Despite the sizable acquisition, Hyprop said its balance sheet remains conservatively positioned. The group’s loan-to-value ratio is expected to rise from 31% to 33.5%, comfortably below its internal ceiling and regulatory limit of 40%.

Chief Executive Officer Morne Wilken said the acquisition reflects strong confidence in Eastern Europe’s retail fundamentals and Hyprop’s long-term expansion strategy. The deal remains subject to approval from Bulgarian competition authorities and the transaction’s senior lender.

Listed on the Johannesburg Stock Exchange, Hyprop manages a retail-focused property portfolio valued at roughly R42 billion ($2.5 billion), with assets concentrated in South Africa and Eastern Europe’s major urban centres.