Property outfit Letlole La Rona (LLR) has announced a Profit before Tax (PBT) of P54.7 million for the half year ended 31 December 2017. The 36 percent growth in PBT was driven primarily by fair value gain on investment properties which are underpinned by the company’s efforts to fully extract the value from investment properties by negotiating for competitive rentals or reversion to market rentals at lease levels. LLR chairperson, Boitumelo Mogopa, said during the period, rental revenue increased by 5 percent to P38.8 million compared to P36.8 million recorded in the previous corresponding period which was driven by anticipated increases through normal annual escalations. Earnings per share saw a growth of 28 percent in the reporting period from 13.74 Thebe in the previous year to 17.59 Thebe in December 2017. The value of LLR’s investment properties has increased by 4 percent over the past six months from P778.0 million to P806.0 million and achieved a gross rental yield of 10 percent. By sector, the leading portfolio by value for LLR is Industrial which constitutes 45 percent of total value, followed by hotels at 33 percent. Retail comes on the third position at 10 percent followed by office and residential at 7 percent and 5 percent respectively.
Mogopa said the company posted impressive results for the first half of the year despite challenging trading environment. “The company has managed to retain most of tenants over the years, maintained a low rate of vacancies and efficient rental collections resulting in low arrears,” she said. In pursuing the company’s strategy to grow and diversify the portfolio, Mogopa said they are at the final stages of concluding the transaction for the acquisition of a 2.5850 hectares retail centre in Mahalapye. “Funding for the project has been approved and the appropriate circular was dispatched to Unit Holders,” she said, adding that this transaction will provide LLR with an opportunity to diversify and create a more efficient portfolio by increasing its exposure to retail from 10 percent to 25 percent.
In addition to the said retail centre, the company is also acquiring an industrial property in Gaborone at a purchase consideration and appropriate cautioner statements have been made. “This industrial property is comprised of nine mini-warehouse measuring between 300 square metres and 700 square metres. Therefore, at the end of the financial year, the value of the company’s investment properties is anticipated to reach the P1 billion mark,” said Mogopa. Mogopa said LLR is the largest single investor in industrial property by value in Botswana and is currently exploring opportunities in the local market in its drive to grow its total portfolio. “In the execution of this endeavour, the company has been cognizant of the need to create an efficient portfolio which would not only withstand market shocks, but also consistently yield resilient returns,” said LLR chairperson on the future outlook.