Director Resigns as Hyprop Moves Toward Agreement with Ellerine Brothers

Extended negotiations between Hyprop and the Ellerine family regarding the Reit’s acquisition of minority stakes in two of the nation’s largest shopping centers appear to be nearing their end, particularly following Kevin Ellerine’s resignation as a non-executive director.

The official statement indicated that Ellerine, who turned 59 in October 2025, would step down effective June 1, 2026, “to pursue personal interests” after serving on the board for 17 years.

Nonetheless, it has long been known that Hyprop was in talks to purchase the 20% of Canal Walk and 24.84% of The Glen that it does not already own from the family entity, Ellerine Brothers, a fact confirmed by Hyprop CEO Morne Wilken in March.

Read: Hyprop divests half of Hyde Park Corner

As a co-owner of these assets, Ellerine was the only non-executive director who was not independent. Additionally, his role on the board’s investment committee could create complications in finalizing any transaction aimed at achieving 100% ownership of both properties.

He would obviously have an inherent conflict of interest since he would be involved on both sides of the deal.

Hyprop, together with Ellerine Bros, acquired Canal Walk for R1.2 billion in 2003. This shopping center is one of the most valuable retail properties in South Africa and the largest mall in Cape Town. At the time, Hyprop CEO Pieter Prinsloo referred to Canal Walk as a ‘trophy’ asset.

The consortium succeeded in a highly competitive bidding process conducted by owner Nedcor. The retail expertise of Hyprop non-executive member Wolf Cesman (former CEO of Redefine), alongside the Ellerine Brothers’ extensive experience in property and retail, which spanned over five decades, played a crucial role in securing the deal.

The super regional center boasts a gross lettable area (GLA) of 147,600m² and its acquisition effectively doubled Hyprop’s portfolio, which then included only Hyde Park Corner, The Glen, and The Mall of Rosebank.

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Wilken has refrained from disclosing the value of Canal Walk. However, given its significant size and prime location, as well as its status as a ‘flagship’ property (which would entail a tighter cap rate), knowledgeable estimates suggest its value ranges between R8 billion and R8.5 billion. This would imply that the 20% stake owned by Ellerine Brothers is valued at approximately R1.6 billion to R1.7 billion.

During the six-month period from July to December, Canal Walk attracted 10.2 million visitors. Its retail vacancy rate stands at a mere 1.4%, one of the lowest in the country, and a multitude of brands have recently opened stores at the mall, including Hisense, Chanel, Incredible, Curve Gear, JD Sports, Silki, Shift Espresso Bar, Baseus, Refinery Junior, Sea Weeds & Sea Storm, Whitehouse, iStore Pre-owned, Bootlegger, Paul, Home.Tech.Sleep, and Jet. Some of these retailers occupied spaces freed up by the right-sizing of the Edgars store, reducing it from 11,000m² to 5,400m².

Read: Major mall landlord moving from Gauteng to Cape Town

In FY2025, Hyprop reported R485 million in net property income from its 80% stake in Canal Walk, while the income from its 75.16% ownership in The Glen (which has a total GLA of 78,600m²) amounted to R123 million.

Ellerine also retains a 3.4% stake in Hyprop, valued at R771 million, which he holds indirectly through off-market derivative transactions. These transactions involve long and short calls (both pertaining to 6,872,660 shares), at strike prices of R31.48 and R47.22, respectively.