Director quits as Hyprop edges closer to deal with Ellerine Brothers

Protracted talks between Hyprop and the Ellerine family for the Reit to acquire its minority stakes in two of the country’s largest shopping malls are likely nearing conclusion given the resignation of Kevin Ellerine as a non-executive director.

The official reason given was that Ellerine, who was 59 in October 2025, would resign from 1 June 2026 “to pursue personal interests” after 17 years on the board.

However, it has been an open secret for some time – and confirmed by Hyprop CEO Morne Wilken in March – that Hyprop was discussing acquiring the 20% of Canal Walk and 24.84% of The Glen that it did not own from a family entity, Ellerine Brothers.

Read: Hyprop sells half of Hyde Park Corner

Given that it co-owned these assets, Ellerine was the only non-exec who is not independent. He is also a member of the board’s investment committee which would pose a complication in the finalisation of any transaction to achieve 100% of both assets.

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He would obviously inherently be conflicted as he would be sitting on both sides of the deal.

Hyprop acquired Canal Walk together with Ellerine Bros for R1.2 billion in 2003. It is one of the most valuable retail assets in the country and the largest mall in Cape Town. At the time, Hyprop CEO Pieter Prinsloo described Canal Walk as a ‘trophy’ asset.

The consortium won a fiercely competitive bid process run by owner Nedcor. The retail expertise of Hyprop non-executive Wolf Cesman (ex-Redefine CEO) together with the Ellerine Brothers’ track record in property and retail (then over five decades) helped the grouping secure the deal.

The super regional centre has a gross lettable area (GLA) of 147 600m2 and its acquisition effectively doubled Hyprop’s portfolio, which at that point only consisted of Hyde Park Corner, The Glen and The Mall of Rosebank.

Read:
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Wilken has previously declined to disclose the value of Canal Walk. However, given its dominant size, location and ‘flagship’ nature (all of which would mean a tighter cap rate), some informed estimates put its value at around R8 billion to R8.5 billion. This would translate into a valuation of around R1.6 billion to R1.7 billion for the 20% stake owned by Ellerine Brothers.

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In the six months between July and December, Canal Walk saw 10.2 million visitors. Its retail vacancy rate of 1.4% is among the lowest in the country, and in the last year-and-a-half, it has seen a large number of brands open stores in 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 took up space made available in the right-sizing of the Edgars store in the mall from 11 000m2 to 5 400m2.

Read: Major mall landlord ditching Gauteng for Cape Town

In FY2025, Hyprop received R485 million in net property income from its 80% in Canal Walk, with the figure for its 75.16% of The Glen (with a total GLA of 78 600m2) being R123 million.

Ellerine also holds 3.4% of Hyprop, valued at R771 million. He holds this exposure indirectly through off-market derivative transactions. These are long calls and short calls (both over 6 872 660 shares), at strike prices of R31.48 and R47.22, respectively.

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