The market in which we operate


The JSE-listed property sector in South Africa is a sizeable market, with some 27 companies managing assets valued at over R350 billion, with an influx of capital after the introduction of REIT legislation in 2013. The local sector is now ranked among the top 10 REIT markets globally, with a comparable value to similar sectors in Singapore and Hong Kong(1). However, only a limited number of REITs are sufficiently liquid to attract foreign investment, while the unlisted real estate market is dominated by South African institutions.

Since 1994, population growth, urbanisation and a rapidly growing middle class have fuelled demand for retail space, placing South Africa in the global top 10 by shopping centres and total floor space. With over 2 000 shopping centres, the country ranks sixth (behind the US, Japan, China, Canada and UK), and seventh on floor space, with some 23 million square metres. While some studies suggest that South Africa has more mall space per head (measured as m2/1 000 people) than its retail sales appear to justify, vacancies – a key indicator of a property sector’s health – remain lower than the average for other countries through the cycle.

A changing market

A changing market

  Clear Water
Importantly, the retail sector has become an important component in the national economy, accounting for more jobs than the mining sector, with hundreds of thousands more jobs indirectly related to the industry.(2)
(1) PwC: Real Estate: Building the future of Africa, 2015
(2) Urban Studies Publication (June 2015) Lisa Steyn: Mail & Guardian

Investing in sub-Saharan Africa

Rapid urbanisation, population changes and global megatrends such as industrialisation, technology and sustainable city planning will drive growth in the real estate industry across Africa over the next five years(2). In almost all markets surveyed in the PwC report, demand for quality retail, office and industrial space is outstripping supply as international and local occupiers capitalise on economic opportunities. The report identified key growth drivers as:

Bullet Africa’s young population is underpinning demand for different types of real estate
Bullet Industrialisation will be accompanied by rapid growth in the retail sector
Bullet Exports of natural resources and agriculture will remain key sources of economic growth, in tandem with increased risk for certain countries
Bullet Infrastructure shortages will create opportunities for investment
Bullet Government policy and legislation will influence the decision to invest, while local partnerships will become increasingly important
Bullet Continued progress in pension fund, stock exchange and banking regimes will facilitate investment, and a broader range of investors will drive demand for real estate investment opportunities
Bullet Technology will impact business and building practices, as well as consumer behaviour
Bullet Sustainability will become entrenched in building design and occupier requirements, with Africa’s most ambitious countries changing city design and building practices.

Real GDP growth (%)

Real GDP growth (%)

Source: Global economic outlook: Sub-Saharan Africa regional
forecast, The World Bank

The weakening and volatility of African currencies is a risk to the company, as it places local tenants under pressure, with a consequent potential negative impact on income.

For REITs like Hyprop, a sustained economic growth rate of around 5% for the continent means an expanding urban class, with the propensity to spend.

Sub-Saharan Africa (excluding South Africa) still has a significant shortage of quality retail property – around two million square metres catering for over one billion people, compared to South Africa with 23 million square metres for 55 million people. Rapid urbanisation also means metropolitan populations are expanding at over 3% per annum, with some cities, such as Accra where Hyprop has a presence, growing at a rate well above that.

Compared to a decade ago, the metamorphosis across African cities is notable – from an explosion in real estate development to the new consumerism. And with a young, urbanising population, all forecasts support the trend continuing.

Manda HillManda Hill Shopping Mall, Zambia


Registration number: 1987/005284/06
2nd Floor, Cradock Heights, 21 Cradock
Avenue, Rosebank, 2196
PO Box 52509, Saxonwold, 2132
Tel: +27 11 447 0090
Fax: +27 11 447 0092


The interactive graph tool allows you to compare data for various elements over the last 5 years. You are able to choose data from the "Five year financial review tables.

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