Management of New African Properties (NAP) believes the current demand of assets in Botswana has had an impact on the pricing and availability of assets which has seen the company register no change in the property portfolio in the past year.
In a joint statement by John Mynhardt and Tobias Mynhardt, who are the Group Chairman and Managing Director respectively contained in the 2014 annual report, said new retail development opportunities in Gaborone are considered limited.
This is in view of the significant developments that have taken place over recent years leading to the oversupply of office market in the capital city.
The company directors say despite the saturated market in Gaborone, it does not mean they have reached a dead-end as there are other opportunities in other towns which the management continues to look at that will meet the primary objective of NAP which is to grow distribution on sustainable basis.
NAP, a public variable rate loan stock company quoted on the Botswana Stock Exchange (BSE) with a market capitalisation of P1.2 billion, owns a portfolio of primarily retail properties for investment.
The company portfolio consists of 65 properties which are predominantly retail and based in Botswana with a small exposure of four percent in Namibia. The industrial segment makes just two percent of the company’s portfolio which also comprises of five percent of the office space.
The office spaces available are contained in some of the retail properties. The majority of the group property is located in urban and semi-urban areas which the management say the move was driven by the demand of retail property in such areas.
NAP has under its portfolio, properties such as Riverwalk, Tlokweng Shopping Centre and Kasane Mall among others with other properties in Molepolole, Maun and Selebi-Phikwe.
During the year under review, NAP experienced a significant increase in profits despite registering no change in the property portfolio.
Net profit before tax is 18.1 percent which is P235.1 million whereas profit after tax increased by 12.9 percent to reach P211 million.
The increase in profit is linked to fair value adjustments of P112.9 million. The company further says the increase in valuations was attributable to growth in net rental income as well as 99 basis point shift in the weighted average capitalisation rate following a reduction in the long bond rates over the year together with other applicable factors.
During the year, distributable earnings amounted to P109 million or 18.03 per linked unit which reflects a 7.2 percent increase. According to the management, this was achieved as a result of increased net rentals and operating profit as well as higher interest earnings.