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The commission has recommended that the Competition Tribunal approve the transaction whereby Hyprop will dispose of 50% of its shareholding the upmarket shopping mall to Millennium’s special purpose vehicle, MEP SPV.
MEP SPV does not control any firm, but it is itself wholly owned by Millennium and set up specifically for the transaction.
Millennium is a real estate investment and management firm which specialises in real estate investment through both investment holding and private equity structures, while also offering advisory services across the property sector.
Hyprop announced the sale of its 50% of Hyde Park Corner to MEP SPV in June.
The property group owns several upmarket and high-profile shopping malls in South Africa, including Rosebank Mall, Canal Walk and Hyde Park Corner.
However, the company is looking to move away from mid-size assets in places like Gauteng, putting its focus on regional malls and assets in the Western Cape and Eastern Europe.
The proceeds will be allocated to reducing debt in the short term and for asset management initiatives, organic growth opportunities, further solar-PV projects and new investments within Hyprop’s existing operations.
Under the terms of the sale, the 50% share of the mall is worth around R805 million, putting its full value at just over R1.6 billion, using 2024 valuations.
The final price will be subject to an adjustment based on the actual financial performance of the mall for the period 1 July 2026 to 30 June 2027, escalated by 5% and capped at a yield of 8.75%.
If the final price is greater than the R805 million, Millennium will be on the hook to make up the difference. Similarly, if it is lower, Hyprop will have to refund the difference.
The Competition Commission said the transaction is unlikely to substantially lessen or prevent competition in any market.
The proposed transaction also does not raise significant public interest concerns, it added.
Fully sold in 2 years
Following the implementation of the transaction, Millennium and Hyprop will also become co-owners of the rental enterprise with effect from the transfer date.
Hyprop intends to sell the second half of the centre within the next two years, and this will be done through put and call arrangements with Millennium to acquire it.
The group said that it concluded an agreement with Millennium, which provides for an option to dispose of the remaining 50% of its share. This will have to be concluded by November 2027, it said.
If the call option isn’t exercised, or if it is exercised and the conditions aren’t fulfilled, Hyprop said it reserves the right to accept third-party offers for the mall in the open market, and Millennium will be obliged to sell its full share on the same terms.
As part of the transaction, Hyprop also provided Millennium with a net operating income guarantee.
This indemnifies Millennium against any shortfall in net operating income of R70 million for a year from 1 July 2025. The maximum shortfall amount is R20 million for the 12 months.
Hyde Park Corner opened in 1969 and is one of Hyprop’s original investments. The mall has seen several changes to its tenant mix over the past few years, and South Africa’s retail landscape shifts and trends change.
The mall has a retail GLM of 38,750sqm and is situated in one of South Africa’s wealthiest areas, with President Cyril Ramaphosa’s primary residence nearby.
It primarily caters to the wealthiest in Sandon. It features a Woolworths, Nu Metro, Exclusive Books, Jo Malone and a new Checkers store.
Issued on BusinessTech by Staff Writer | https://businesstech.co.za/news/business/835778/r1-6-billion-luxury-shopping-mall-in-south-africas-richest-area-being-sold/
