After last year’s stellar run, which sent the share prices of at least a dozen property stocks up more than 40%, the good times continue to roll for real estate punters. Latest results confirm that investors can now also expect inflation‑beating dividend growth after several years of low or no uplift in income payouts.
In fact, some property counters are set to deliver double‑digit dividend growth this year, with Waterfall City developer Attacq and retail‑focused Hyprop Investments leading the way. The two real estate investment trusts (Reits) last week reported strong results for their interim reporting period to December, both confirming they are on track to deliver distributable income growth of at least 10% for the financial year to June. That compares with analysts’ average earnings growth forecast of 5%-7% for the sector as a whole in 2026.
Results have been buoyed by particularly strong trading metrics in Attacq and Hyprop’s shopping centre portfolios. Both have also made impressive headway in reducing debt and shoring up balance sheets. In the five years to December, Attacq’s loan‑to‑value (LTV) shrank from well over 40% to 25%, while Hyprop’s fell from 53% in 2019 to 31%.
Attacq surprised the market by raising its full‑year growth guidance from 7%-10% to 11%-14%.
CEO Jackie van Niekerk cited increased take‑up of vacant space, solid rental growth and lower finance costs as key reasons for the upward revision. Speaking at last week’s results presentation, she said: “Operationally, our portfolio is doing better than expected on all metrics.”
Besides Mall of Africa and Waterfall Corner at Waterfall City, Attacq also owns Lynnwood Bridge and Brooklyn Mall in Tshwane, Eikestad Mall in Stellenbosch, Garden Route Mall in George and MooiRivier Mall in Potchefstroom.
The Reit’s retail portfolio delivered an average 4.2% growth in trading density (sales turnover per square metre) for the six months to December, with standout performances from MooiRivier Mall (up 6%) and Lynnwood Bridge (up 6%). Vacancies continue to decline and are now at a lowly 2.2%. The best-performing retail sector was department stores, including Game, Checkers Hyper and Woolworths, which achieved 8% growth. Van Niekerk ascribed this to “sustained retailer confidence and continued investment in store upgrades”.
She noted that retailers generally still have the appetite to roll out new stores and upgrade existing ones. At Mall of Africa, Attacq’s largest retail asset spanning more than 130,000 m², five new brands — Coach, Kate Spade, Silky, Kids Around and Bootlegger — opened in the six months to December. In addition, eight retailers refurbished their stores, including Cotton On, Emporio Armani and G‑Star. At Lynnwood Bridge, The Pro Shop completed a major refurbishment, while MooiRivier Mall introduced Uniq Clothing and RocoMamas.
At Garden Route Mall, 11 store revamps were completed, including new formats for Food Lover’s Market and Incredible Connection.
Importantly, the improved retail trading climate means mall owners can increase rentals again, a key driver of earnings and dividend growth. Attacq achieved an average renewal reversion of 3.6% in its shopping centre portfolio, while rentals on new leases were 4.2% higher. That’s in stark contrast to Attacq’s office and logistics portfolios, which recorded negative rental reversions of 5.9% and 6.1%, respectively.
Trading metrics reported by Hyprop, which owns nine South African and four Eastern European shopping centres, paint an equally resilient picture of consumer spending.
Hyprop’s portfolio, which includes Canal Walk and Somerset Mall in and around Cape Town, and Rosebank Mall, Hyde Park Corner and The Glen in Joburg, achieved an average 7.5% uplift in trading density in the six months to December, well ahead of the 4.3% reported in the same period of 2024.
Top performers include Table Bay Mall near Bloubergstrand, acquired in late 2023, and Clearwater Mall in Roodepoort, both of which grew trading density by 10.5%. Clearwater’s numbers were boosted by the opening of South Africa’s first Walmart store in November, which drove a 20% year‑on‑year increase in foot count that month alone. Somerset Mall, which is undergoing a R320m redevelopment due for completion in July, had a 9.1% increase in trading density.
Foot count across all nine local centres was up 1.9%, while vacancies dropped from 4.2% to 3.1%, thanks to a slew of new tenants.
These included Walmart at Clearwater; a flagship Incredible Connection store and South Africa’s first Hisense store at Canal Walk; 21 new stores at the enlarged Somerset Mall; and Checkers FreshX, Petshop Science and Maison Deux (a luxury department store concept) at Hyde Park Corner.
Rental reversions clocked a healthy 7.6%. Hyprop’s four Eastern European centres also delivered inflation‑beating trading density growth of 3.6% and a 2.7% rental reversion, with a vacancy rate below 1%.
Hyprop’s earnings rebound follows a lengthy restructuring under CEO Morné Wilken. Selling the loss‑making Sub‑Saharan Africa portfolio and simplifying its Eastern European interests helped reduce euro debt. Locally, Hyprop repositioned its portfolio by tweaking the tenant mix in several malls, investing in upgrades and extensions, and expanding its Western Cape footprint. Earlier this year, Hyprop sold 50% of Woodlands Boulevard in Tshwane for R791m to reduce its Gauteng exposure.
After a multiyear decline, Hyprop returned to growth last year with a 7.5% increase in distributable income. Earnings and dividend growth are set to accelerate to 10%-12% for the year to June — despite two capital raises last year that increased shares in issue by 7%. Management also raised the dividend payout ratio from 80% to 82.5%.
Wilken tells the FM: “After spending the past seven years sorting out the sins of the past, Hyprop is finally on the front foot again.”
Hyprop is now eyeing acquisitive growth. Following last year’s capital raises — earmarked partly for a potential takeover of MAS PLC, which didn’t materialise — Hyprop has a war chest of more than R3bn in cash and bank facilities.
“We now have a lot of firepower to acquire assets without having to raise equity again,” Wilken says, noting advanced talks with owners of two Eastern European centres. In South Africa, the focus will be on extensions at Table Bay and Cape Gate, with limited opportunities to buy more malls. “The ones we like aren’t on the market.”
Hyprop and Attacq delivered total returns of 61% and 51%, respectively, for the 12 months to February. However, both share prices are down about 10% in the past two weeks on the back of rising tension in the Middle East — a dip some investors may see as a buying opportunity.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.