Hyprop Investments Limited (HYP) Earnings Call Transcript & Summary

Good afternoon, and welcome to Hyprop's Interim Results for 31 December 2025. Thank you to all the shareholders for their ongoing support. A big thank you to all the high performers for your dedication and hard work. Just to recap, Hyprop is a specialist retail fund with one of the best retail portfolios in South Africa. We create spaces and connect people and the way we do it is by owning, managing and redeveloping dominant retail centers in mixed-use precincts in key economic nodes in South Africa and Eastern Europe. Looking at our agenda, I will touch on our key priorities for the year, the headlines, Wayne will give us an update on the operational performance in South Africa, Yvette will present operational performance in Europe, Brett, the financial results, and I will handle the closing. At the end of the session, we will have a Q&A session. Thank you. We have made good progress in terms of our priorities. We are on track to meet the upper level of our guidance as communicated to the market. We have sold 50% undivided share in Woodlands Boulevard, and this transaction achieved 3 strategic objectives. We reduced our exposure in Gauteng, recycle some capital to reinvest into new and organic growth opportunities whilst retaining the majority share in the mall and participate in the future upside as the surrounding catchment area densify. All the CPs has been met to implement the transaction, and we expect transfer to happen towards the end of March or early April. We have made good progress securing new growth opportunities in Eastern Europe, of which 2 transactions are well advanced. We made good progress with our discussions with the Ellerine family on their direct property investments, which include undivided shares and Canal Walk as well as The Glen. We have decided to increase the payout ratio to 82.5% for the final dividend payment in September. The interim dividend will remain at 95% of our distributable income of the South African portfolio. After this increase, we are approaching the Board's maximum payout ratio. Just for a reminder, the payout ratio is to ensure we have sufficient capital to maintain our portfolios and retain its relevance with our repositioning strategies. In terms of balance sheet, we have reduced the group LTV to 31%. The LTV in Europe has reduced to 41.2%, and our ICR has improved to 3x cover. To date, we have made little progress with the sale of the Lango shares. The installation of the second phase at The Glen CapeGate solar projects has started and both will be completed in this calendar year. We have made good progress with the regulatory approvals for the solar installations at both Somerset Mall as well as Canal Walk. We have started with the 5-day backup water supply in the Western Cape. The first section of Phase 2 of Somerset Mall project opened in November, and the last section will be completed in July this year. We have made good progress with the planning on the Phase 3 extension to increase Somerset Mall to 90,000 square meters. At Hyde Park Corner, we have agreed with Workshop 17 to start the fit-out over the last 2 floors in a North Tower. The project to increase the solar capacity in the battery storage system have started. At The Glen, we are still negotiating with tenants to start the Phase 1 of the master plan, and we are revisiting the priorities around the CapeGate master plan. We have made very good progress to rightsize and upgrade our anchor stores. At Hyde Park Corner, we have replaced the old Pick n Pay store with a new Checkers FreshX store, which is trading in line with expectations. The new store had a very positive impact with an increase in foot count as well as vehicle count. At Clearwater Mall, we converted the old Game store to the first Walmart store in South Africa, and we are in discussions to convert some of our other Game stores in the portfolio. We have agreed terms with Woolworths to upgrade the stores at Rosebank Mall and Woodlands Boulevard. All the Edgars stores, except the one in CapeGate are now rightsized and trading well in the reduced space. Unfortunately, we have made, I would say, not acceptable progress with Pick n Pay repositioning. In our Eastern Europe portfolio, we secured the group approvals on both the Croatian malls, and we have made good progress with the planning around the extension of City Center One East. The retiling at City Center One West is progressing well, and we will complete before the end of the financial year. Eventually, we have find a workable solution for the solar in Croatia, and those plants will be operational at the end of the calendar year. In terms of headlines, I have covered some of these headlines in the previous slides, so I will focus on the ones not mentioned yet. We had excellent operational performance in both South Africa as well as Eastern Europe portfolios for the last 6 months. The group's distributable income has increased by 12.9% to ZAR 864 million for the last 6 months. Distributable income per share increased by 5.4% to ZAR 2.123 per share. This was due to the additional capital that was raised during the year. The number of shares in issue increased by 7% from 379.8 million shares to 406.7 million shares. The Board approved the interim dividend of 95% of the distributable income of South African portfolio. The approved dividend plus the antecedent dividend of ZAR 0.02 is ZAR 1.19 per share. This is a 4.9% increase on the previous interim dividend. We have a healthy liquidity position with ZAR 949 million in cash and ZAR 2.3 billion available bank facilities. After the sale of Woodlands Boulevard, the group LTV will reduce below 30%. On the South African portfolio, all the operational performance are looking positive. The tenant turnover increased by 5% and trading density by 7.5%. Average foot count increased by 1.9% and the retail vacancies reduced from 4.1% to 3.1%. We had positive rent reversions of 7.6%, and Wayne will unpack that in more detail later. The last section of Phase 2 extension at Somerset Mall and the bathroom upgrade are on track and will be completed in July 2026. In Europe, our tenant turnover increased by 3.8% and trading density increased by 3.6%. The vacancy remained low at only 0.2%, and we had positive rent reversions of 2.7%. Good progress with the reconfiguration at City Center One East and then we will be able to open the first Sephora store in Croatia. Now I will hand over to Wayne to give us an update on the operational performance of South Africa.

Thank you, Morne, and good day to everyone. Hyprop's South African portfolio continues to benefit from its repositioning strategy with general trading metrics exceeding inflation. The strong operational performance of our 9 prime retail centers, best testament to their appeal, supported by a resilient LSM shopper base in the markets in which they reside. The South African portfolio constitutes the bulk of our business operations, which predominantly consists of regional and super regional assets, constituting 68% of our investment property, 58% of our distributable income and equates to 78% of our total GLA. The SA portfolio consists of 7 large regional malls, 1 small regional center and 1 super regional mall and are all located in key economic nodes of which 4 are located in the Western Cape, 5 in Gauteng. Over the past 6 months, we have welcomed more than 45.8 million visitors to all our malls, and we have generated turnover in excess of ZAR 15 billion. If we move on to our trading performance for the 6-month period. Key trading metrics for the 6-month period ending December 2025 were very pleasing. Tenant turnover grew by 5%, which is up on the same period prior year, where we experienced growth of 4.8%. Trading density rose by 7.5% as at half year 2026, which is significantly above the 4.3% increase in 2025. Coupled to this, we have seen a further decline in the portfolio effort ratio, which is basic rental plus our operating costs, our rates and marketing fund divided by our total turnover for the portfolio against the prior period from 7.9% down to 7.7%. If we look at the performance of the various assets in a little bit more detail in terms of their turnover performance, Canal Walk turnover grew by 4.8% and trading density was up by 6.9%. Somerset Mall turnover grew by 5.4% and densities grew by 9.1%. CapeGate was up by 3.3% in terms of turnover, coupled with a 3% density growth. Table Bay Mall was in line with expectations with turnover growth of 12% and density growth of 10.5%. The Rosebank Precinct showed good turnover growth of 6.1% with density growth of 4.7%. Hyde Park Corner also showed good turnover growth of 11.5% and trading density growth of 7.2%. The Glen better-than-anticipated turnover and density growth of 7.2% and 7.4%, respectively. Clearwater Mall saw an increase of 1.7% in tenant turnover, however, positive trading density growth of 10.5%. And Woodlands turnovers were up 3.6% with trading densities growing nicely at 9.5%. Continuing with our SA trading performance. Our average monthly foot count showed solid growth of 1.9% for the half year 2026. This against our half year 2025 growth of 0.6%. Noting the growth in turnover and foot count, the spend per head for half year 2026 grew by 3.1%. Focusing now on our SA trading performance over a 5-year trend. The following graph show the trends in key metrics over a 5-year period ending December 2025. Table Bay Mall is excluded unless otherwise specified. Turnover growth from tenants remains positive at 5.4%. Rental income growth is 2.2% and turnover rental growth equates to 4.7%, down against last year, but mainly due to this income now being incorporated into base rental structures. The weighted average lease escalation shows a stable trend at 6.5%. Moving on to the leasing activity. It is pleasing to note that the overall reversion rate increased to 7.6% and the retail new deal reversion achieved was 29.6%. The retail vacancy reduced from 4.2% as of June 2025 to 3.1% as at half year 2026. This mainly due to the rightsizing of anchor tenants and reclaimed space being relet to new tenants. Total vacancies have reduced from 4.9% in June 2025 to 3.9% as at half year 2026. Continuing with our leasing activity. The leasing workload for the financial year 2026 equates to just over 200,000 square meters. The workload balance as at the 31st of December 2025 is 136,514 square meters. This comprises the following: deals under negotiation currently equate to 62,000 square meters and expiries of just over 46,000 square meters with vacancies totaling just over 27,000 square meters. Total expiries for our financial year 2026 are 113,000 square meters and good progress has been made in this regard as at half year 2026. I would now like to touch on some of our projects that we've completed during the course of the first 6 months and those that are ongoing. Most of these important projects are taken -- undertaken each year in our SA portfolio. And I want to touch on a few of our asset management and repositioning strategies. At Hyde Park Corner, the much anticipated Checkers FreshX and Petshop Science commenced trading in August 2025. This has had a positive impact on foot count and vehicle counts. If we look at Clearwater Mall, Walmart opened its first store in South Africa at Clearwater, resulting in an increase in foot count of 20% in the same month. Clearwater Mall also completed its bathroom upgrade and that opened in November 2025. In terms of Somerset Mall, the new athleisure and affordable luxury mall extension was launched in November 2025. 21 new tenant partners were welcomed to the center, of which some are the first to open their doors in the Western Cape. In addition to the above, the entire center was retailed, and this was completed in October 2025. Continuing with Somerset Mall, all of the bathrooms are currently being upgraded and will be completed in April this year. A new Somerset Mall food court and market, which will include artisanal kiosk offerings and an entertainment center with a Freedom Interactive play park is scheduled for completion at the end of July 2026. Moving on to our flagship mall in Canal Walk. Century City has evolved substantially and as a mixed-use node is recognized as one of the leading precincts in South Africa. As a result of this, Hyprop has identified that it needs to further enhance its connectivity to the various surrounding developments to improve ease of access. Construction has commenced on the Otter Bridge to facilitate access across the canal from the northeast side of the mall and completion is due in June 2026. This is highlighted by the red circle on the right side of the layout. In addition to this link will be constructed from the center to the existing Crystal Towers bridge now called the Marriott Hotel to improve access to the center from the northwest side of the canal and the residential developments currently underway in the Old Ratanga precinct. This will be completed in November '26. This is highlighted by the red circle on the left-hand side of the layout. Moving on to The Glen. Solar PV remains one of our key priorities in terms of rollout for Hyprop as a group. At The Glen, we are currently busy with our Phase 2 solar installation. This consists of a 3.1-megawatt plant, which will be completed in May 2026. At CapeGate, we are currently busy installing a 4.9-megawatt Solar PV installation. This is scheduled for completion in August 2026. In terms of our environmental impact, at Hyprop, we fully support ESG initiatives, and we will continually invest in these to drive operational efficiencies and to have a positive impact on the environment. Some initiatives underway and achievements to date are as follows: as of December 2025, total solar capacity equates to 18.7 megawatts. We have commenced additional solar projects at The Glen and CapeGate. Good progress is also being made for the installation of Solar PV at Canal Walk and Somerset Mall. A battery energy storage and project has commenced at Hyde Park Corner and water consumption has been reduced by 7% from January to December 2025. This equates to some 35,000 kiloliters of savings since the implementation of water saving training and monitoring programs. The recycling rate for the SA portfolio has improved to 78%, and we are very proud that 5 of our centers in the portfolio have achieved net zero waste certifications from the Green Building Council of South Africa. In closing, the South African portfolio has delivered a good set of interim results. We are continuously investing in our assets and repositioning the SA portfolio for growth for defensive purposes. We will remain focused on driving operating income and asset value while staying true to our purpose of creating spaces and connecting people. On behalf of our leadership, I want to extend a special word of thanks to all teams involved in the SA portfolio and for everyone's efforts in terms of our interim results and look forward to maintaining and enhancing our current trajectory for the full year. We trust that we can exceed expectations. Thank you. I would now like to hand over to Yvette van der Merwe, who will talk us through the Eastern European portfolio.

Thank you, Wayne, and good afternoon to everybody. Before we start with this section of the presentation, I would like to give a high-level market overview of Eastern Europe. After the strong disinflation trend of 2024 and 2025, inflation across most CEE and FEE countries have stabilized between 2.5% and 3.5%, broadly aligning with the European Union's target range. Some markets in our region remain slightly above the EU average due to energy price adjustments and wage growth pressures. The European Central Bank continued its gradual monetary easing cycle in late 2025, implementing additional rate cuts, leading to more favorable financing conditions compared to the previous years. Regional GDP growth in 2026 is projected between 2.5% and 3.2%. Domestic consumption remains the main driver, supported by real wage growth and improving purchasing power. In terms of the retail market dynamics, prime shopping sectors, particularly dominant centers with strong international brands, food and beverage and entertainment anchors continue to show high occupancy levels and stable footfall. Performance is strongest in capital cities and major regional hubs. Secondary shopping centers remain under pressure. Vacancy rates have increased slightly in some markets and leasing activity is slower as retailers consolidate into dominant assets. Retail parks remain one of the strongest shopping formats in the region. Investors and tenants favor the lower operating costs, convenience-driven model and resilience in secondary cities. Retail sales recorded in the second half of '25 followed temporary disruptions caused by regional protests and consumer boycotts earlier last year. Consumers remain price sensitive, but real disposable income is now improving more visibly due to wage growth outpacing inflation. Discount retailers, value fashion, food operators, they continue to outperform premium discretionary segments. E-commerce penetration continues to extend. However, physical retail space has demonstrated resilience through omnichannel integration, experiential offerings and destination-led repositioning strategies. Geopolitical risk remains a monitoring factor, but economic resilience across the region has strengthened. In conclusion, the retail market is characterized by the following: stabilized inflation, gradual monetary easing, moderate, but positive GDP growth, strong bifurcation between prime and secondary assets, strong shift towards developing more retail parks, ESG-focused, improving yet still selective investment liquidity. Moving to the slides. on the macroeconomic and retail environment. The GDP growth in Bulgaria is expected to remain in the range between 3.1% and 2.6% from '26 onwards. The inflation was 3.6% in '25 and is expected to reduce further to 3.4% in 2026, then slowly decreasing in the next few years to 2.4% by 2030. The unemployment rate in Bulgaria remains one of the lowest in the Eurozone at 3.5% in 2025, which is lower than the European average. The total shopping density in Sofia is 300 squares per 1,000 inhabitants. Bulgaria has adopted the euro currency as from the 1st of January 2026 and is a fully fledged Schengen member. In Croatia, the GDP growth in '25 was 3.1% and is expected to decrease slightly from 2026 onwards. The inflation was 4.4% in 2025 and is expected to reduce to 2.8% in '26. Unemployment is forecasted to remain healthy at 5%. The total shopping density in Zagreb is the highest in our portfolio at 590 square meters per 1,000 inhabitants. North Macedonia has stable GDP growth in the range of 3% to 3.4%. The inflation was 3.9% in 2025 and is expected to decline to 3% in 2026, approaching the targeted rate of 2% from 2028 onwards. The unemployment rate is around 12.8% and the shopping density in Scorpio is 326 squares per 1,000 inhabitants, and this is due to new entry of shopping centers in the last couple of years. On the next slide, we look at our trading performance for the 6 months period. Looking at the turnover from July to December, there was a 3.8% increase compared to the previous year. The trend continues in January with a strong 5% increase. Due to the improved turnover, the effort ratio decreased by 0.1% for the 6-month period and the same decrease is observed in January as well. The trading density increased by 3.6% compared to last year. And in January, the positive trend continues with 4.7% increase. On the next slide, we continue with our trading performance. Our footfall for the 6 months showed a decrease of 3% compared to last year. It's worth mentioning that we had an exceptionally long extended summer period in Southeastern Europe that lasted until October last year and all shopping centers based in capital cities, including our competitors, reported negative footfall due to this extended summer. In January, our footfall decrease was less than 2%. The spend per head increased by 7% compared to the same period last year, and the same trend continues in January. On the next slide, we look at our 5-year trading performance. Our turnover in 2025 recorded an increase of 4% compared to 2024. Our rental income increased 4.3% on a year-on-year basis. Indexation peaked in 2022, reaching 6.2% and decreased to 2.2% in 2025. Our turnover rent increased by 4.5% compared to last year. On the next slide, we look at our leasing activities during the past 6 months. The renewal reversion rate was 1.2% on 10% of the GLA. The new deals reversion rate was 17.1% relating to 1% of the GLA. The overall reversion rate is 2.7%, which relates to 11% of our total portfolio GLA. During the period, our retention rate was 90.6%. The breakdown of the overall reversions for all deals for the period includes positive reversions of 18%, flat reversions of 71% and only 11% were negative reversions. The total occupancy rate is 99.8%, and we have a 0.2% vacancy in our portfolio. The lease expiry workload over the next 4 years is smoothly spread with the highest expiry of 33% in the year 2023 and beyond. On the next slide, we continue with our leasing activity. The lease workload at the beginning of the financial year was 32,607 squares, while by the end of December, it reduced to 11,645 squares, of which only 431 squares were vacant. On the next slide, we see some photos of our retailing project at City Center One West in Zagreb, which will be completed in the next few days. On the final slide, we look at our environmental impact. The Solar PV projects have been approved for both City Center One East and City Center One West, and the anticipation completion is December 2026. We have completed our internal and external lighting replacement with LED lights in both City Center One East and West and the monthly estimated reduction in energy use in CCO East is 20 kilowatt hours and in West 17 kilowatt hours. I would like to take this opportunity to thank our leadership for their guidance and support, and a big thank you to the incredible Hyprop Europe team for your commitment and dedication. We delivered good results for the first 6 months and look forward to ending this financial year on a high note. I will now hand over to Brett, who will take you through the financial results of our presentation.

Thank you, Yvette, and good afternoon, everyone. Distributable income grew 12.9% from ZAR 765 million in December 2024 to ZAR 864 million, and we're on target to achieve the upper end of guidance we gave of a 10% to 12% increase in distributable income per share for the 2026 financial year. Distributable income for the South Africa portfolio increased by ZAR 47 million or 10.4% to ZAR 501 million. Income, excluding the straight-line rental revenue accrual grew 5% or ZAR 81 million due to a 4.2% increase in contractual rental income. Costs increased by ZAR 68 million. The largest increases were in utility costs, which increased by 12.6% and depreciation, which increased by 25% as a result of the CapEx over the last few years. Salary and staff-related costs reduced mainly due to the outsourcing of Hyde Park Corner's property management and reversals of excess bonus provisions and long-term incentive provisions from 2025. Net interest costs reduced by ZAR 34 million to ZAR 345 million. This was due to a reduction in borrowings following the 2 capital raises in 2025 and a reduction in the interest rates. The European portfolio delivered another good performance. In euros, lease revenue increased 5.4%, following a 4.8% increase in contractual rental revenue. The average indexation for the period was 2.2%. Property expenses increased by 5% compared to December 2024. These resulted in a 5% increase in net property income in euros. Net interest costs reduced by ZAR 1.6 million as borrowings were reduced compared to HY 2025 and the average cost of borrowings reduced from 4.7% to 4% in H1 2026. Distributable income in euros increased 14% from EUR 16 million to EUR 18 million in the current period. The average rand-euro exchange rate weakened from ZAR 19.42 in the prior period to ZAR 20.28 and resulted in an 18% increase in distributable income from the portfolio to ZAR 363 million. Let's take a moment to analyze the changes in distributable income per share or DIPS. The table on the left shows the calculations of distributable income per share based on the actual number of shares in issue at the end of the period and the weighted average distributable income per share based on the weighted average number of shares in issue during the year. The graphs on the right-hand side show the effects of the new shares issued during 2025 on the growth in DIPS from December 2024 to December 2025. I will unpack these now. As a result of the new shares issued in June and December 2025, the number of shares in issue increased by 7% from ZAR 380 million in December 2024 to ZAR 407 million currently and resulted in an increase in DIPS of 5.4% to ZAR 2.12 for the period. If we calculate DIPS using the weighted average number of shares in issue, this increased 7.2% from ZAR 2.015 in December 2025 -- sorry, 2024 to ZAR 2.159. This takes account of the 7 million new shares issued in December 2025. The DIPS for December 2024 is based on the number of shares in issue before the ZAR 800 million capital raise in June 2025, for which 20 million new shares were issued. The dilutive effect of this share issue only comes through in the June 2025 results. However, if we recalculate the December 2024 DIPS using the number of shares in issue in June 2025, DIPS for December 2024 would have been ZAR 1.92. The weighted average DIPS of ZAR 2.15 for December '25 represents a 12.5% increase from the ZAR 1.92 for December 2024. Our FY 2026 guidance was based on the number of shares in issue at 30 June 2025. The analysis which I've just been through illustrates how by using the same number of shares in issue, we are on track to achieve our guidance for 2026 of a 10% to 12% increase in DIPS from 2025. Talking about cash flow. This slide illustrates the highly cash-generative nature of the portfolios, which underpins the quality of the distributable income we generate. The top left-hand graph reconciles the cash generated from operations to distributable income for HY 2026. The top right-hand graph shows the movements from the statement of cash flows for the period. The 2 graphs at the bottom do the same analysis for FY 2025. Looking at the top right-hand graph, cash generated from operations for the period was ZAR 1.4 billion from which we paid ZAR 473 million of interest and ZAR 49 million of tax, leaving a balance of ZAR 903 million available to the group. What is important is that this ZAR 903 million exceeds the distributable income of ZAR 864 million for the period. We invested ZAR 266 million in capital -- of CapEx in our portfolios. Some of the major projects include the Somerset Mall Phase 2 expansion, new parking systems at Canal Walk and Clearwater, additional solar and energy projects at The Glen and Hyde Park Corner and the retailing of CCO West in Croatia as well as several tenant installations. We settled a net ZAR 503 million of borrowings and raised ZAR 400 million of capital in December 2025. This cash has been used to reduce borrowings, pending its permanent deployment in capital and other expansion projects. The final dividend for FY 2025 of ZAR 775 million was also paid, leaving a cash balance in December '25 of ZAR 944 million, excluding the assets held for sale. If we include the assets held for sale, our total cash balances at 31 December were ZAR 949 million. The cash is invested with various financial institutions, as shown on the slide, including through money market funds. The average deposit rates which we earn are 7.2% in rands and around 1% in euros. As shown on the graphs too, these deposit rates have reduced over the period with the easing in the interest rate cycle. Some other notable items in the financial results. The fair value of the property portfolios increased by ZAR 1.7 billion in total, ZAR 1.2 billion in South Africa and ZAR 457 million in Eastern Europe. The main reason for the increase is the growth in net operating income of the properties. The increase in the value of Somerset Mall also reflects the opening of the retail portion of the Phase 2 expansion and certainty on the leasing outcomes, which exceeded our initial feasibilities. While the increase in CapeGate includes the savings from the new solar plant, which is being installed. The cap and discount rates used by the valuers in Eastern Europe were unchanged from June 2025. The rates in South Africa were also unchanged other than for 3 properties where the rates were reduced by 0.25% given the more stable economic environment and positive outlook, favorable interest rate cycle as well as the performance and appeal of the centers. The tax charge of ZAR 142 million relates to income tax and the deferred tax on revaluation of the investment properties in the European portfolio. The effective cash tax rate was 13.5%. Looking now at the borrowings. Total borrowings reduced from ZAR 14.7 billion in June to ZAR 13.8 billion in December 2025. Rand borrowings decreased through the repayment of loans using the capital raised in June and December. Total euro borrowings remained constant at ZAR 302 million. In-country borrowings reduced by ZAR 5 million through the amortization payments and a net ZAR 5 million of revolving credit facilities were drawn. The rand equivalent of the borrowings reduced due to the improvement in the rand-euro exchange rate in December. Our borrowings remain spread amongst different lenders, as shown in the top right-hand graph. And the DCM remains an important element of our funding strategy. We appreciate the support we receive from DCM investors as well as our lender banks -- sorry, DCM funding other than from the lender banks was a total of 23% of borrowings. The group's LTV ratio reduced from 33.6% in June to 31% in December. The main factors influencing the LTV are the increase in the fair value of the investment properties and capital raised in December 2025. The effect of the net cash movements from operations, dividends paid and capital expenditure is neutral on the LTV, which is how our dividend policy was originally designed. Following disposal of the 50% undivided share in Woodlands, the group LTV should reduce below 30%. The LTV of the South Africa portfolio reduced to 26.7%. And for the European portfolio, it reduced to 41.2%. This is very close to the target of 40%, which we communicated when we adopted the new dividend policy, at which time the European portfolio LTV was above 47%. We will continue reducing the borrowings in the European portfolio by amortizing in-country facilities and retaining distributable income to settle equity debt, subject obviously to any changes in the dividend payout ratio. We intend settling a further EUR 15 million of the equity term debt when we refinance the EUR 50 million term loan that is due in July 2026. We look at the debt maturity profile. Several work streams are underway to refinance borrowings, which mature this calendar year. The ZAR 249 million bond, which matured in January was settled from cash and available facilities. We plan to return to the bond market to refinance the ZAR 240 million listed bond, which matures in April 2026. Should market conditions not be favorable, we have ample liquidity and available facilities to settle this bond. Refinancing the unlisted bond of ZAR 500 million, which matures in May is being evaluated on a similar basis in addition to proposals received from lenders. EUR 70 million of the equity debt facilities mature between now and July. We will settle EUR 15 million of the term facility on expiry and refinance the balance through a new EUR 20 million revolving credit facility for 2 years and a EUR 35 million term loan for 1.5 years. The margins on these new facilities are between 20 and 90 basis points lower than the expiring facilities. The in-country term facility of EUR 73 million relating to the mall in Sofia, which expires in December is being refinanced and terms have been agreed with the incumbent lender. The margin on the new facility is 25 basis points lower than currently being paid. Implementation of the refinance should be completed before the end of the financial year. Discussions on refinancing the balance of the rand facilities, which mature in the second half of the year have begun, and we are awaiting proposals from lenders. The group's liquidity remains strong with ZAR 949 million in cash and ZAR 2.3 billion of undrawn facilities on 31 December. The proceeds from the sale of Woodlands or the 50% of Woodlands will improve liquidity even further. The value of the unencumbered investment properties have increased marginally to ZAR 8.1 billion with total unencumbered assets of ZAR 10 billion. The interest cover ratio for the period was 3x compared to 2.6x in FY 2025. The main reason for the reduction is the decrease in interest costs from ZAR 573 million in HY 2025 to ZAR 508 million in the current period. The cost of funding for rand borrowings reduced from 9% in June to 8.6% as the benefits of our hedging strategy to use caps and collars bears fruit. The average margin was stable at 1.5%. The average cost of borrowings in euros was 4%, down from 4.2% in June. The average margin on borrowings was also unchanged at 2.1%. 75% of the group's interest rate exposure on term facilities was hedged at the end of December. 74% of rand hedges are caps and collars, allowing us to participate in the reduction of interest rates as is evident in the lower average cost of borrowings. To end, Morne has already explained the changes to the dividend policy for 2026. An interim dividend of ZAR 1.17 per share has been declared. This is based on 95% of the distributable income for the SA portfolio for the period. In addition, we have declared an antecedent dividend of ZAR 0.02 per share, which is also based on the 95% of distributable income from the South Africa portfolio. Lastly, I would like to thank our on-site and head office finance teams in South Africa and Europe for their hard work preparing these results. Thank you, guys. It's been a real team effort. With that, I'll hand you back to Morne to close.

Thank you very much, Brett. In closing, in the last few years, we have repositioned Hyprop, and now we are on the front foot to grow the business. The sale of the 50% undivided share in Woodlands Boulevard will be implemented by the end of March. We are well advanced in some opportunities in Eastern Europe, and we want to secure one or more deals before the end of the financial year. The organic growth opportunities we are currently working on is the extension -- further extension at Somerset Mall, which we call Phase 3 and the extension at City Center One East in Croatia. We'd like to finalize the terms with the Ellerine family, and we are busy with a number of projects in South Africa. The 4 remaining on-site solar projects remain a key priority. Phase 2 at the Glen and CapeGate Solar will be operational before September of this year. We will complete the integrated battery solution at Hyde Park Corner and we'll pursue some further hybrid energy storage systems on the portfolio. On the Western Cape portfolio, we're busy installing 5 days of backup water. We complete the last section of Phase 2 at Somerset Mall, consisting of the new food court and an entertainment offering. Finalize and start the first phases of the master plans at the Glen as well as CapeGate, continue our discussions with Pick n Pay, Walmart and Woolworths to upgrade and rightsize their stores to improve the performance as anchors in our portfolio. On the Eastern Europe portfolio, complete the retailing of City Center One West in Croatia and complete the solar plants at the 2 Croatian malls. At Somerset Mall, we have done a Phase 1 where we opened a new Checkers Fresh X and improved the food court supporting the cinemas called Cinema Connect. Phase 2, we added additional 5,500 square meters. Phase 3 will be a further expansion of about 14,500 square meters. We will link the current Woolworths entrance and the Pick n Pay entrance. Above the extension, we will build a parking deck to replace the parking base, we will lose as part of the development. This parking deck will have a direct vertical connection into the retail floor below. The tenant mix will focus on fashion tenants, home and furniture tenants as well as casual and formal dining. This extension will further enhance the flow in the center with a secondary racetrack. After completion of Phase 3, the center will have a total size of 90,000 square meters. Phase 3 development will be yield enhancing with initial return above 10%. It will also add to the total return with attractive development profit on completion. We would like to finalize the plans and get the necessary approvals in this year and start construction towards the end of the calendar year or early 2027. At The Glen, Phase 1 of the master plan will be improved the flow and secure some further line stores and improve the tenant mix. As part of the project, we want to increase the size of the back stores and activate the back end of the center, which are not trading well by improving the flow as well as the view lines. This can be seen with the green arrows on the plan. We also want to improve the flow from the parking deck to the escalators in the back. This can be seen in the red arrow on the plan. We will start Section 1, and then we will start Section 2 after the terms with the anchor tenant has been finalized on the reduced Pick n Pay store. Phase 2 of the master plan will focus on the vertical flow from this level of the center to the ground floor, which is anchored by Woolworths and Checkers FreshX. After the group approvals, the team had been working hard to finalize the extension at City Center One East. This extension will be done on the open parking deck in front of the mall with 2 new retail levels. The last parking will be replaced with a basement and a parking deck on top. Part of the development will improve and extend the food court. What is good about the development is that the extension can be done without a major disruption to the existing mall. The extension will be around 14,000 square meters and will increase the mall to a total of 61,260 square meters. Development should be yield enhancing given we don't have to pay for the land and the planning is to start ASOP, but most realistically towards the end of the calendar year. We will now give an opportunity for some questions.

Thank you so much, Morne. We've got a couple of questions online. First is Trinity from Anchor Stockbrokers. The question is, could you comment on whether the disclosed NPI for Woodlands is representative of a sustainable run rate for the mall? And what would the implied net exit yield be for Woodlands?

I think we've sold the asset at a forward yield of 8.5%. Obviously, if you use the NOI of the previous period, it was a little bit distorted given there was a number of ones off in that NOI. I think we actually could see good growth going forward in terms of Woodlands. As you know, we have rightsized the Edgars as well as Pick n Pay and that space is currently vacant, and we will actually do a more widening project at Woodlands Boulevard, where we actually will generate income from those spaces we have taken back. But those are obviously not in the income numbers.

Then we have another question from Trinity. What has been your experience of Walmart's foot count relative to Games?

No, there's definitely been a big uptick in terms of foot fall as well as tenant turnover. And it's in line with what Walmart expected. But what we -- what was very positive is actually the tenant turnover of a number of the other stores also picked up. And that is just a good testament of why it's so important to have the right anchors in your stores and that anchors need to be upgraded. So it's definitely working very well for us. And I think we're excited to see what they can do next.

Next, we have several questions from Francois at Anchor Stockbrokers, which I'll tackle one at a time. The first is what has driven the reduced utility costs in Eastern Europe portfolio? And how sensitive is the EE portfolio utility cost to the international energy prices, i.e., the oil price?

Francois, the biggest change in the utility cost comes through the subsidy we get in Bulgaria, where the government subsidizes energy prices as they -- if they exceed a certain level. And that subsidy comes and goes as the prices change. We did have a reduction in that subsidy in the past 6-month period. Some of our energy costs are hedged, but I'd have to come back to you on exact details of how much of those costs are hedged at the moment.

Next question. What were the costs associated with the Pick n Pay, Edgars and Absa rightsizing at Woodlands? And will part of these costs be picked up by the new owners or still 100% Hyprop's responsibility?

Those costs was incurred before the new purchaser came on board. So that definitely is our cost. I think, as I mentioned, with the mall widening, as mentioned to Trinity, that is going to be picked up by the joint owners. But they will only start paying anything on the mall when they become owners of the mall. But the intention is for them to then to participate in that cost going forward. I don't think we have disclosed exactly in detail what was the breakdown of all those costs. So we will have to come back to you on that, Francois.

Then did the Somerset Mall upgrade supports increased NPI in the first half of FY '26? Or will it only reflect in the second half?

It will only reflect in the second half because the mall extension of the 5,500 squares only opened in November, and we're reporting now for December. So that's not really in the numbers. Plus the food court hasn't been finished as yet. That will only finish in June. So the big benefit of all those will only actually be seen in the first 6 months of the 2027 financial year.

Then we have a question from Nazeem at Investec. I calculate the like-for-like NPI growth for South Africa of 1% year-on-year. What was the key reason for this? How much was rates refund in the first half base? And Woodlands vacancies taking back space from Pick n Pay and Edgars? Can you please confirm?

I think the Edgars space that was taken back, I think that was actually done in the previous financial year, [indiscernible]. I'll have to come back to you on the percentage. But the 1% growth in NPI, I think, is a correct calculation. You can work it out from the segmental information in the financial results. I think it's quite simple that you've got costs growing at a higher rate than what our income is growing at. Income grew roughly 5% in South Africa at a lease revenue line, and you've got your major costs which are increasing utilities, in particular, at 12.6% despite the solar that we have and the depreciation charge. but your calculation is correct.

We've got another question from Francois at Anchor. Can you give some color around the ZAR 266 million CapEx in the period? How much of that was on solar and how much in South Africa?

So Francois, if you look in the results commentary, on Page 8, we give a breakdown, but some of the larger projects were the Somerset Mall expansion, we spent ZAR 122 million in the period. We did the largest TI that we spent was for Maison Deux at Hyde Park Corner, where we spent ZAR 16 million. You've got solar projects at The Glen and Hyde Park Corner with ZAR 25 million in total. You've got the new parking system at Canal Walk and Clearwater was ZAR 19 million. So that's a fairly large portion of the ZAR 220-odd million we spent in South Africa. In Croatia, the large -- or in the Eastern European portfolio, the largest project was the tiling of CCO West, where we spent -- we didn't spend EUR 2 million on that project, but the total CapEx for the portfolio was ZAR 2 million in the period.

Then we have a question from [indiscernible] at Sanlam Private Wealth. How has the footfall normalized at Clearwater Mall post the initial month of opening the Clearwater store? How many Game stores are in your portfolio? Are you looking to convert to a Walmart? And what is the criteria considered for whether a game will be converted or not?

I think some of those questions can only be answered by Walmart, but we have a number of game stores in our portfolio still. If I now think the only -- where we don't have a Game is actually Rosebank and Woodlands. So we have got Game stores in the rest of the portfolio. So there's effectively 7 of which Clearwater was converted. So there's potentially a 6 that you can convert. In terms of footfall, it has reduced thereafter. Obviously, that was a new event. So the 20% has increased. I don't know what's that normalized number, so we will have to come back to you.

Another question from Nazeem at Investec. What was the reason for the minus 3% decline in footfall in Eastern Europrint portfolio across the portfolio? Or is it asset specific?

No, I think it was touched in the presentation by Yvette where she said summer holidays was longer, and therefore, your -- what do you call it, capital cities actually had less people going to that. But I think it's also important to see that the tenant turnover has still increased. So that's actually a measure to see if the malls are trading well. But I put -- I think the big reason for footfall was the long summer holidays. And then you also have those non-Sunday tradings in Croatia, which also have a negative impact on footfall, although the tenants -- the shoppers comes less frequently, they will come and then they will spend even more than they used to spend. So the impact on your tenant turnover is something we're also measuring quite tightly. But obviously, you want to make sure that people come to the mall.

Another question from Nazeem. Can you confirm the Board maximum payout? Did you say that the 82.5% payout is the max?