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Hyprop Investments Limited
Integrated annual report 2016
22
down of the bridge loan. The long-term funding for the transaction
will be at a higher cost than the bridge funding. It is anticipated
that the long-term funding of the transaction will be in place from
February 2017.
The delay in payment of the final tranche of the purchase
consideration for Delta City Belgrade, as well as the lower cost of
funding for the bridge loan, are both once-off benefits to Hyprop
in the 2016 financial year and the first half of the 2017 financial year.
Net asset value
The net asset value (NAV) per share at 30 June 2016 increased by 6,1% to
R94,50 (2015: R89,04). The increase was primarily due to an increase in the
independent valuation of the investment property portfolio.
At 30 June 2016, the closing share price of R129,89 represented a
premium of 37,4% to the NAV per share.
FINANCIAL DIRECTOR’S REPORT
continued
Investments in South-Eastern Europe
Hyprop share of
distributable earnings
(2)
Hyprop’s
effective
shareholding
%
Rentable
area m
2
Valuation
30 June
2016
(1)
EUR000
Value per
rentable
area
EUR/m
2
Vacancy
%
30 June
2016
R000
Total portfolio
60,0
53 605
206 100
3 845
–
31 944
(1)
Valuation reflects 100% of the asset value
(2)
Hyprop share of distributable earnings is reflected after interest on corporate debt
The purchase of Delta City Podgorica (Montenegro) was effective
in February 2016, while the purchase of Delta City Belgrade (Serbia)
was effective in April 2016. Implementation of the acquisitions are
progressing well and income is in line with expectations.
The purchase consideration for Delta City Podgorica has been
paid in full, while payment of EUR49,3 million of the total purchase
consideration relating to Delta City Belgrade was delayed, pending the
fulfilment of certain conditions.
Notwithstanding the delay in payment, all net property income from
Delta City Belgrade accrued to the purchasers from the effective date
in April 2016. The outstanding amount was paid in September 2016.
The Delta City acquisitions were funded with EUR-denominated
bridge funding, supported by a guarantee from Hyprop. The bridge
funding will be refinanced within 12 months following the initial draw-
Borrowings
30 June
2016
Rm
30 June
2015
Rm
Bank debt
9 344
4 520
South Africa
2 992
2 327
USD (Rand equivalent)
(3)
4 842
2 193
EUR (Rand equivalent)
(4)
1 510
Debt capital market funding (South Africa only)
1 640
2 172
Corporate bonds
1 200
1 800
Commercial paper
440
372
Cash and cash equivalents
(239)
(138)
Net borrowings
10 745
6 554
Loan to value %
30,8
22,9
Debt at fixed rates %
South African debt %
89,6
96,7
USD debt %
72,4
89,9
Maturity of fixes years
South African debt years
4,9
5,6
USD debt years
3,7
4,1
Cost of funding %
South African debt %
8,9
8,4
USD debt %
4,6
4,4
EUR debt %
1,7
Debt capital market (DCM) % of total debt
15
19
(3)
The USD debt includes 75% of the in-country debt relating to Ikeja City Mall (Lagos, Nigeria)
(4)
The EUR debt, which relates to Hyprop’s effective 60% interest in the South-Eastern European shopping malls, is not consolidated on the Hyprop statement
of financial position