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Hyprop Investments Limited
Integrated annual report 2016
34
RISK MANAGEMENT
continued
Strategic
objective
Key risk
Probable effects
Severity
of risk Stakeholder
BBBEE
Attracting and
retaining the best
people
BBBEE level
•
•
Major tenants prefer landlord
to have reasonable BBBEE
rating
High
•
•
Employees
•
•
Suppliers
•
•
Tenants
Negative impact of new codes
•
•
Potential impact on
corporate activity in SA
Transformation required in
ownership, directors and senior
management
•
•
Potential for regulatory
penalties
ELECTRICITY
Providing the
highest level of
service to our
tenants
Negative impact of disruptive
electricity supply on the
economy and at Hyprop malls
•
•
Unable to recover tenants’
portion of consumption
means lower distributable
income
•
•
Lower rentals to retain
certain tenants
•
•
Prolonged power outages
result in sub-optimal trading
conditions
Medium
•
•
Mall customers
•
•
Tenants
Increase in capital cost to
provide more generators
•
•
Increased electricity and
diesel costs
Medium
•
•
Municipal authorities
WATER
Providing the
highest level of
service to our
tenants
Negative impact of disrupted
water supply at Hyprop malls
•
•
Prolonged water outages
result in sub-optimal trading
conditions
Medium
•
•
Mall customers
•
•
Tenants
LOCAL COUNCILS
Providing the
highest level of
service to our
tenants
Increased cost of occupancy
from rates, taxes and utilities
•
•
Cost and supply of electricity
and water
•
•
Excessive increase in cost of
occupancy impacting
recoveries and renewals
Medium
•
•
Tenants
Deterioration of municipal
administration and service
delivery
•
•
Incorrect utility billings
•
•
Delays in transfer of
acquisitions and disposals
•
•
Inadequate services provided
•
•
Excessive lead times for town
planning approval
High
•
•
Tenants
•
•
Providers of capital (debt
and equity investors,
financial institutions)
SECURITY
Providing the
highest level of
service to our
tenants
Increased levels of crime at
shopping centres
•
•
Hyprop forced to spend
more capital on security
equipment
•
•
Crime at shopping malls
•
•
Negative impact on footfall
•
•
Reputational damage for
Hyprop and for its malls
Medium
•
•
Mall customers
•
•
Tenants
•
•
Community
Internal risks (under control of management)
External risks (can be mitigated by management)
External risks (outside the control of management)