Hyprop Investments, a Real Estate Investment Trust specialising in high-quality shopping centres, has sold half of its stake at Woodlands Boulevard shopping centre in Pretoria for R750-million.
The transaction comes as Hyprop wants to raise cash to explore growth avenues outside Gauteng.
The 50% shares have been sold to three parties, including Primegrowth Property Proprietary Limited, Witfontein Mile Proprietary Limited, and Twin City Trading 2 Proprietary Limited—who will each acquire 16.66% of the shares.
The three companies and Hyprop will become co-owners of Woodlands Boulevard upon implementation of the transaction.
The co-ownership agreement stipulated that a co-owner could not sell its undivided share unless it first offered that share to the other co-owners in proportion to their existing stakes.
It also required the purchasers to obtain Hyprop’s written consent before any change in control, and Hyprop could only withhold or delay such consent for a reasonable cause.
The buyers have previously bought Atterbury Value Mart in Pretoria from Hyprop Investments for R1.12-billion in 2021.
Hyprop has highlighted that the transaction was aligned with their strategy to declutter in Gauteng and unlock capital to explore other opportunities for growth outside the province.
Plan to keep 50% of Woodlands Boulevard
They own Clearwater Mall, Hyde Park Corner, Somerset Mall, CapeGate, and Table Bay Mall, among a list of other properties where they hold majority shares.
Hyprop indicated that they plan to keep the remaining 50% of Woodlands Boulevard shopping centre.
The company gave the buyers a rental guarantee, protecting them against unexpected drops in rent and unplanned vacancies for two years from the transfer date.
Hyprop’s responsibility under the rental guarantee was limited to a maximum of R10-million for the first 12 months after the transfer date and R10.6-million for the second 12 months.
However, rental guarantees did not apply when tenants failed to meet their lease obligations after the allowed grace periods, when companies collapsed, when tenants entered business rescue, or in any other situations not listed in the sale agreements.
Management was outsourced to Twin City Asset Management Proprietary Limited, which shares a common shareholder with Twin City.
The company and the purchasers would handle the daily running of the business, while Twin City will recuse itself from voting on some matters.
The management company was appointed for an initial 12 months, with the agreement reviewed each year for renewal.
