RDC revenue shoots to P66 million
Botswana conceived and listed property outfit RDC realised proliferated revenue for the half-year ended June 2018, the Botswana Stock Exchange (BSE) listed group reports.
According to the company’s financials released this week the real estate group which owns properties in Mozambique and South Africa amongst other regional markets accrued over P66 million pula in revenue for the six month ended June 2018 compared to 43 million registered during the corresponding period ended June 2017 , mirroring over 50 percent increase.
This also output satisfactory figures of 26 % climb in profits for the period. Over 35 million was recorded as profits for the period under review compared to 28 million gathered in the corresponding period last year. According to Guido Giachetti the Executive Chairman of RDC which owns amongst other lucrative properties , the Masa Square Hotel building in Central Business District(CBD) Gaborone ,the good results realized by his company are underpinned by in large the stable Botswana portfolio and significantly the solid performance of the Capitalgro portfolio in South Africa.
Capitalgro acquired The Edge building on 20 March 2018 which runs at 100 percent occupancy rate, at a total acquisition cost of R307 million (about P227 million), financed through a bank mortgage loan and a Capitalgro rights issue. Giachetti reveals that RDC R120 million (P88.8 million) participation to the rights issue resulted in the company‘s shareholding in Capitalgro increasing from 34.8 percent to 62.9 percent.
“We are presently evaluating a number of opportunities presented to the Capitalgro team and we are confident of the prime portfolio that we are building in the Cape Town area,” he said. The company which is one of Botswana‘s first real estate and the country‘s first listed property company also continued to implement its regional expansion plan through this period.RDC also reports satisfactory progress on leasing activities at its ICC Flats in Extension 9 Gaborone.
According to the Global Property Guide (GPG) the Botswana's residential property market remains largely underdeveloped, but carrying huge growth potential. “Because of the absence of official and timely house price statistics in Botswana, it is difficult to analyze the market, but local real estate experts say that house prices in the country have continued to rise in recent years,” states the global property organisation in their annual report released recently .
GPG observes that the relative lack of housing supply has led to high rental yields in Botswana, according to research they conducted in 2017, suggesting that yields of 6.5 percent to 9.5 percent can be enjoyed on residential property in Gaborone and Francistown.
This is supported by a recent research conducted by Centre for Affordable Housing Finance in Africa (CAHF), which shows that rental properties in the city centre currently offer high gross rental yields of 7.9 percent Residential properties located outside the city centre also offer healthy rental yields of about 5.5 percent. RDC states that going forward the company will explore potential expansion avenues of its residential portfolio which occupies 3 percent of its total business.
“We are evaluating a few other development opportunities in the local market,” the report highlighted. On the regional portfolio, for its Mozambique property division the company also reports satisfactory performance and expansion progress. “We are pleased to report that Xai Xai shopping centre building works have been completed and the anchor tenant is expected to commence their fit-out as soon as possible. The advanced earthworks have commenced at the Zimpeto project; this is expected to be a 24 months project. We also continue to explore other opportunities in Mozambique,” explained the RDC Executive Chairman.
The report highlighted that in the Namibian market which the company recently expanded to, the construction of several buildings was awaiting relevant authorities approval. “We expect to imminently start building works for the convenience centres in Tsumeb and Grootfontein after the ministerial approval of the land transfer and finalisation of the deeds of sale.”
The company further hopes to convert proceeds sales from their interest on the City Lights project in the United States of America into a yielding portfolio. The RDC board declared a distribution to linked unit holders of 0.124 thebe per ordinary share as interim dividend as well as interest of 6.206 thebe per debenture . RDC Properties, a Developer and Property Investment company is the first property listed company on the Botswana Stock Exchange. 1996.
The Company holds income-generating investments in properties and also carries out property developments. The property portfolio includes landmark properties such as: Masa Centre; Standard Chartered House, Chobe Marina Lodge, Isalo Rock Lodge, and many others situated all over Botswana and in Madagascar.
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Grit divests from Letlole La Rona
Grit Services Limited, a member of the pan African real estate group, London Stock Exchange listed Grit Real Estate Income Group is divesting from Letlole La Rona Limited (LLR), a local real estate company established by government investment arm Botswana Development Corporation over a decade ago.
The Board of Directors of Letlole La Rona Limited this week announced in a statement to Unitholders that Grit Services Limited (‘Grit’) has informed them of its intention to exit its investment in the company.
Grit has been a material shareholder in LLR since 2019. On 07 March 2023, Grit sold 6 421 000 linked units, representing 2.29% of the Company’s total securities in issue, at a market value of BWP 22 537 710.
This trade follows previous sales of 6.79% in December 2022, as communicated to Unitholders on 10 January 2023, as well as a further sale of 4.78% (representing 13 347 068 linked units) on 24 February 2023 to various shareholders.
In aggregate, Grit has sold 13.9% shareholding in the Letlole La Rona between December 2022 and March 2023, resulting in current shareholding of 11.25% in the Company.
Letlole La Rona said in the statement that the exit process will take place in an orderly manner so as to maintain stability of the Company’s share price.
The statement explained that Grit’s sale of its entire shareholding in LLR is in line with its decision to exit investments where it does not have majority control, or where it has significant exposure to currencies other than US dollar, Euro or hard-currency-pegged revenue streams.
“Grit has announced similar decisions pertaining to certain of its hospitality assets in Mauritius recently. The Company would like to advise Unitholders that it remains focused on long-term value delivery to all stakeholders” LLR said
In July last year as part of their Go-to-Africa strategy Letlole La Rona acquired an initial 30% equity stake in Orbit Africa Logistics, with an option to increase this investment to 50%. OAL is a special purpose vehicle incorporated in Mauritius, owning an industrial asset in a prime industrial node in Nairobi, Kenya.
The co-investment was done alongside a wholly owned subsidiary of London listed Grit. The Orbit facility is situated on a prime industrial site on Mombasa Road, the principal route south of Nairobi center, serving the main industrial node, the port of Mombasa and the industrial town of Athi River and is strategically located 11 kilometers south of the international airport and 9.6 kilometers from the Inland Container Depot.
Grit shareholding in Letlole La Rona was seen as strategic for LLR, for the company to leverage on Grit’s already existing continental presence and expand its wings beyond Botswana borders as already delivered by Kenya transaction.
Media reports have however suggested that LLR and Grit have since late last year had fundamental disagreements on how to go about the Go-to-Africa strategy amongst other things, fuelled by alleged Botswana government interference on the affairs of LLR.
Government through LLR founding shareholder – Botswana Development Corporation has a controlling stake of around 40 percent in the company. Government is the sole shareholder of Botswana Development Corporation.
Letlole La Rona recently released their financial results for the six months ended December 2022, revenue increased by 4% to P50.2 million from P48.4 million in the prior comparative six months, whilst operating profit was up 8% to P36.5 million. Profit before tax of P49.7 million was reported, an increase of 8% on the prior comparative six months.
“We are encouraged by the strong results, notwithstanding a challenging economic environment. Our performance was mainly underpinned by annual lease escalations, our quality tenant base and below average market vacancy levels, especially in our warehouse portfolio,” Kamogelo Mowaneng, Letlole La Rona Chief Executive Officer commented.
LLR reported a weighted average lease expiry period of 3.3 years and escalation rates averaging 6.8% per annum for the period ended 31 December 2022.Its investment portfolio value increased by 14% year-on-year to close the period at P1.4 billion, mainly driven by the acquisition of a 30% stake in OAL in July 2022.
The Company also recorded a significant increase in other income, predominantly due to foreign exchange gains on the OAL shareholder loan. “We continue to explore pipeline opportunities locally, and regionally in line with our Go-to-Africa strategy and our interest remains on value-accretive investments,” Mowaneng said.
An interim distribution of 9.11 thebe per linked unit was declared on the 6th of February 2023 for the half-year period to 31 December 2022, comprising of a dividend of 0.05 thebe and debenture interest of 9.06 thebe per linked unit which will be paid to linked unit holders registered in the books of the Company at the close of business on 24 February 2023.
Stargems Group establishes Training Center in BW
Internationally-acclaimed diamond manufacturing company StarGems Group has established the Stargems Diamond Training Center which will be providing specialized training in diamond manufacturing and evaluation.
The Stargems Diamond Training Institute is located at the Stargems Group Botswana Unit in Gaborone.
“In accordance with the National Human Resource Development Strategy (NHRDS) which holds the principle that through education and skills development as well as the strategic alignment between national ambitions and individual capabilities, Botswana will become a prosperous, productive and innovative nation due to the quality and efficacy of its citizenry. The Training Centre will provide a range of modules in theory and in practice; from rough diamond evaluation to diamond grading and polishing for Batswana, at no cost for eight weeks. The internationally- recognized certificate offered in partnership with Harry Oppenheimer Diamond Training School presents invaluable opportunities for Batswana to access in the diamond industry locally and internationally. The initiative is an extension of our Corporate Social Investment to the community in which we operate,” said Vishal Shah, Stargems Group Managing Director, during the launch of the Stargems Diamond Training Center.
In order to participate in this rare opportunity, interested candidates are invited to submit a police clearance certificate and a BGCSE certificate only to the Stargems offices. Students who excel in these programs will have the chance to be onboarded by the Stargems Group. This serves as motivation for them to go through this training with a high level of seriousness.
“Community empowerment is one of our CSR principles. We believe that businesses can only thrive when their communities are well taken of. We are hoping that our presence will be impactful to various communities and economies. In the six countries that we are operating in, we have contributed through dedicating 10% of our revenues during COVID-19 to facilitate education, donating to hospitals and also to NGOs committed to supporting women and children living with HIV. One key issue that we are targeting in Botswana is the rate of unemployment amongst the youth. We are looking forward to working closely with the government and other relevant authorities to curb unemployment,” said Shah.
Currently, Stargems Group has employed 117 Batswana and they are looking forward to growing the numbers to 500 as the company grows. Majority of the employees will be graduates from the Stargems Diamond Training Center. This initiation has been received with open arms by the general public and stakeholders. During the launch, the Minister of Minerals and Energy, Honorable Lefoko Moagi, stated that the ministry fully endorses Stargems Diamond Training and will work closely with the Group to support and grow the initiative.
“As a ministry, we see this as an game changer that is aligned with one of the United Nations’ Six Priority Sustainable Development Goals, which is to Advance Opportunity and Impact for Diversity, Equity, and Inclusion (DEI). What Stargems Group is launching today will have a huge impact on the creation of employment in Botswana. An economy’s productivity rises as the number of educated workers increases as its skilled workmanship increases. It is not a secret that low skills perpetuate poverty and widen the inequality gap, therefore the development of skills has the potential to contribute significantly to structural transformation and economic growth by enhancing employability and helping the country become more competitive. We are grateful to see the emergence of industry players such as Stargems Group who have strived to create such opportunities that mitigate the negative effects of COVID-19 on the economy,” said the Minister of Minerals and Energy.
Food import bill slightly declines
The latest figures released by Statistics Botswana this week shows that food import bill for Botswana slightly declined from around P1.1 billion in November 2022 to around P981 million in December during the same year.
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