Hyprop Investments Limited (Hyprop) is pleased to announce it has concluded an agreement with Hystead to acquire the remaining four assets within the Hystead Eastern European (EE) portfolio. These core assets include, Skopje City Mall in North Macedonia; City Center One East and City Center One West in Croatia; and the Mall of Sofia in Bulgaria. Hystead’s fifth property, Delta City Podgorica in Montenegro, is in the process of being sold and Hyprop will retain its existing €45 million interest in the asset, representing 60% of the value, until the sale is complete.
Hyprop currently owns 60% of Hystead, with PDI Investment Holdings owning the other 40%.
The Hystead acquisition properties accord with Hyprop’s strategy for its EE portfolio of premium retail properties in their respective jurisdictions and have the potential for future growth through active asset management and development initiatives, drawing on Hyprop’s South African expertise.
The transaction will enable Hyprop to take full control of the Hystead acquisition properties, with the following impact:
- an increase in Hyprop’s effective interest in the Group’s EE portfolio;
- an alignment of Hyprop’s economic interest in the Hystead properties being acquired and mitigation of its risk exposure;
- the optimisation of Hystead’s capital structure and the Group’s borrowings and gearing profile;
- the consolidation of the Hystead acquisition properties in Hyprop’s financial statements, providing greater disclosure and transparency; and
- retention of the experienced Hystead asset management team, ensuring management continuity, and positioning Hyprop to grow its EE portfolio in the long-term.
Morné Wilken, Hyprop CEO, said: “The transaction is in line with our strategy to further diversify our exposure into Eastern Europe, mitigating the company’s risk to a weaker South African economy and will address some concerns previously raised by shareholders.
Hyprop remains focused on creating safe environments and opportunities for people to connect and have authentic and meaningful experiences, thereby creating long-term sustainable value for all stakeholders.”
Hyprop is confident that the Group’s strategy and key priorities remain relevant, even in a prolonged Covid-19 environment and the focus for the EE portfolio remains to retaining the dominance of the malls through active asset management initiatives and strategic redevelopments, leveraging the Group’s SA expertise and know-how, securing rights for further mall extensions to satisfy tenant demand and completing the refinancing or settlement of the equity debt.
Once the transaction is concluded and Delta City Podgorica is sold, the intention is to wind up Hystead in an orderly manner. This will include settling all Hystead’s outstanding debt and releasing Hyprop and PDI from all guarantees in the shareholders’ agreement.
Hyprop shareholders are advised to exercise caution in their dealings until a further announcement is made.