Hyprop: No TFG Store Closures Expected in South Africa Malls

• Hyprop does not anticipate any TFG-brand store closures in its malls, despite TFG's plan to shut up to 365 stores across South Africa over three years.
• Hyprop CEO Morné Wilken states that all TFG stores in their malls are 'trading well' with positive turnover growth.
• TFG is Hyprop's second-largest tenant by GLA and likely its largest net income contributor, occupying 7.5% of its portfolio.
• TFG's closures are part of a strategy to enhance profitability, with 85 stores already shut in FY2027 and more planned, while prioritizing its online platform, Bash.
• Hyprop is actively managing other tenants, completing Edgars rightsizing in most malls and upgrading Woolworths stores, though facing challenges with Pick n Pay and Game.

Hyprop, a prominent owner of shopping centers in Gauteng and the Western Cape, has indicated that it does not foresee any closures of TFG-branded stores within its extensive portfolio, despite The Foschini Group's broader strategy to shut down a significant number of outlets.

Hyprop, a prominent owner of shopping centers across Gauteng and the Western Cape, has indicated that it does not foresee any closures of TFG-branded stores within its extensive portfolio, despite The Foschini Group's broader strategy to shut down a significant number of outlets. This assurance comes as TFG plans to consolidate its physical footprint by closing as many as 365 stores over the next three years across South Africa.

Morné Wilken, Hyprop's Chief Executive Officer, confirmed that all The Foschini Group stores situated within their malls are performing strongly. He highlighted that an analysis of their financial data reveals positive growth in turnover for these specific locations. Consequently, Hyprop has not yet found it necessary to identify potential replacement tenants for any TFG spaces, given the current robust performance of these stores.

TFG holds a crucial position within Hyprop's tenant roster, ranking as the second-largest tenant by gross lettable area (GLA), only surpassed by Woolworths. TFG currently occupies 7.5% of Hyprop's total portfolio, a slight reduction from its 7.6% share recorded in June 2025. However, due to a substantial portion of Woolworths' space being dedicated to its food offerings, which command significantly lower rental rates than apparel retailers, TFG is likely the primary contributor to Hyprop's net income among its tenants. This context is vital when considering the potential impact of any Hyprop TFG store closures South Africa might experience.

Hyprop's top five tenants also include major supermarket chains such as Pick n Pay, Shoprite Holdings, and Massmart, alongside Woolworths and TFG. The Foschini Group maintains a presence, through one or multiple brands, in every one of Hyprop's malls, which include iconic locations like Canal Walk, Somerset Mall, CapeGate, and Table Bay Mall in the Western Cape, as well as Rosebank Mall, Clearwater Mall, The Glen, Woodlands, and Hyde Park Corner in Gauteng.

The Foschini Group's decision to reduce its store count is part of a strategic initiative aimed at enhancing overall profitability and improving return on capital. The retailer has already closed 85 stores during the initial 21 weeks of its 2027 financial year, spanning from April to August. Projections indicate that approximately 80 additional stores are likely to be closed within the remainder of FY2027, followed by an estimated 100 closures in each of the subsequent two financial years.

Anthony Thunström, TFG's Chief Executive Officer, elaborated on this strategy during the company's full-year results presentation on March 31, 2026. He acknowledged that the group intended to shut hundreds of underperforming stores as part of a broader reset. Thunström revealed that around 300 stores were operating at marginal profitability, noting that even those incurring losses were generally doing so minimally. He attributed many of these stores falling into this marginal or loss-making category to the tightening market conditions experienced over the preceding six months, emphasizing that they might not have been in such a state 12 months prior.

Thunström affirmed the group's commitment to closing these stores as swiftly as lease agreements permit. A key aspect of TFG's strategy involves prioritizing its online and omnichannel platform, Bash. He highlighted that the R1.1 billion in additional sales generated by Bash during the year was equivalent to the revenue that would have required opening over 100 new physical stores. Achieving this same sales outcome through traditional physical expansion alone would have necessitated an investment of approximately R500 million in store capital expenditure and inventory.

Beyond its positive assessment of TFG's performance, Hyprop has been actively managing its tenant mix and upgrading its properties to maintain portfolio strength. Over the past year, ending in June, the real estate investment trust successfully completed the rightsizing of Edgars stores across most of its malls, with the project at CapeGate currently in progress. Furthermore, Edgars was reintroduced to the tenant lineup at Somerset Mall earlier in the year, signaling Hyprop's dynamic approach to tenant relations.

Hyprop is also making consistent advancements in upgrading Woolworths outlets throughout its portfolio. The renovation of the Woolworths store at Rosebank Mall has commenced and is slated for completion by March of the following year. Discussions are also underway with Woolworths to expand the size of its store located at Table Bay Mall, indicating ongoing investment in key anchor tenants.

However, Hyprop has encountered challenges in rightsizing stores for other major retailers, specifically Pick n Pay and Game, where acceptable progress has not yet been achieved. Despite these hurdles, the company has demonstrated innovation in repurposing spaces. At Clearwater Mall, the former Game store was successfully converted into the first Walmart store in Africa, which opened in November 2025 and subsequently reported high double-digit growth in foot traffic. The Game store at Somerset Mall, however, was successfully right-sized.

The contrasting fortunes of TFG's broader store portfolio and its specific outlets within Hyprop malls underscore the evolving landscape of South African retail property. While many retailers are rationalizing their physical footprints in response to economic pressures and the rise of e-commerce, Hyprop's ability to maintain strong performance from its TFG tenants highlights the resilience and strategic management of its prime locations.

Hyprop's proactive engagement with its tenants, including rightsizing efforts for Edgars and ongoing upgrades for Woolworths, demonstrates a commitment to adapting to market demands. The successful conversion of the Game store at Clearwater Mall into a Walmart, leading to significant increases in footfall, exemplifies Hyprop's capacity for strategic innovation and its focus on optimizing its assets for maximum appeal and profitability.

This dynamic environment means that landlords like Hyprop must continuously assess tenant performance and market trends. The company's confidence in its TFG stores, coupled with its active management of other key retailers, positions it to navigate the broader retail consolidation trends effectively, ensuring its malls remain attractive destinations for both shoppers and high-performing tenants.

Source: Original reporting via Moneyweb