Wesbank

Property market remains lucrative

SHARE   |   Thursday, 26 April 2018   |   By Kabelo Adamson
Sandy Kelly Sandy Kelly

Having published their financial results for the past year, it is evident that property industry players’ performance remains robust, more especially in the capital, Gaborone.

Listed property entities have been announcing increase in profits from rentals. This shows that the sector still remains profitable, despite the insurgence of properties across sectors all the sub-sectors of the industry.

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PrimeTime has just published its financial results for the half year period ending 28 February 2018.

The group says it achieved an 18 percent increase in rental income year-on-year having seen some tenants occupy spaces at the new Pilane which became the subject of dispute as the beginning as tenants were not awarded Trading Licenses due to standoff with government.

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Tenants have since begun occupying their spaces while at other properties of the company; tenants are renewing their leases, which looks all positive for the company.

The company is continuing with other developments locally as well as outside the country, in particular Zambia.

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Another listed property outfit Letlole La Rona (LLR) has maintained profitability. LLR said it has managed to retain most of its tenants over the years, maintained a low rate of vacancies and has an efficient rental collections resulting in low arrears.

During the past year, LLR rental income went from P36.8 million to P39.0 million with profit before tax going up by 36 percent.

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The company is expecting to break records this year as it anticipates its investment properties to reach the P1 billion mark. It currently stands at P806.0 million as at December 2017.

Owners of Masa Square Hotel, which is situated in the New CBD in Gaborone, RDC Properties have also realised an increase in profitability.

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In challenging local market conditions, the company said it delivered a very good set of results with revenue growth of 9 percent which was driven mainly by the Chobe Marina Lodge.

The company registered a seven percent increase in profit after tax, including a P86 million investment property valuation gain.

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RDC is also on the verge of completing 45 residential apartments at the ICC Flats property in Gaborone and are expected to be completed during the third quarter of 2018.

Far Property, which has most of its portfolio concentrated on industrial property, has also seen a positive year in 2017. Its rent yield was up by 11 percent with vacancy rate kept below 5 percent. Its revenue increased from P58, 2 million to P67, 5 million for the six month period ending December 2017.

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However Turnstar this week issued a cautionary statement to the effect that its operating profits are would be affected by some few factors.

Among them, the owners of Game City Mall, point to the delay in the completion of construction of the new of the mall.

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The company also decries that the government did not issue Trading Licenses to the prospective tenants who had signed pre-leases and these issues are said to have delayed the leasing of the new wing of Game City.

However, the majority of the premises have now been occupied with rentals continuing to be received over the last few months. The group cautioned shareholders that results for the year ended 31 January 2018, will be lower than those reported for the year ended 31 January 2017.

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The depreciation of the US Dollar against the Pula has also conspired with other factors to negatively affect the financial results of Turnstar.

  

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