NOTES TO THE FINANCIAL STATEMENTS – NOTE 37

37. Capital management
 

The company’s borrowings are limited to 60% (2014: 60%) of the directors’ bona fide valuation of the consolidated property portfolio, including listed property securities (if applicable). Following the conversion to a REIT on 1 July 2013, the maximum permitted gearing ratio per the company’s Memorandum of Incorporation was aligned to the JSE Listings Requirements, which currently permit a maximum gearing level of 60%.

The company is funded by bank debt, debt capital market funding, and in some instances new equity (formerly debenture capital).

The company’s capital management objective is to maintain a strong capital base to provide sustainable returns to shareholders and other stakeholders over the long term.

Hyprop’s unutilised borrowing capacity at 30 June can be summarised as follows:
    GROUP
June 2015
R000		   GROUP
June 2014
R000		   COMPANY
June 2015
R000		   COMPANY
June 2014
R000		  
  Value of property portfolio 28 565 526   25 819 264   26 226 405   24 174 738  
  60% thereof 17 139 316   15 491 559   15 735 843   14 504 843  
  Total gross borrowings (long term and short term) 6 691 909   7 198 853   5 259 966   5 805 597  
  Unutilised borrowing capacity 10 447 407   8 292 706   10 475 877   8 699 246