Turnstar Managing Director, Gulaam Husain Abdoola has reported that the property market has remained relatively strong despite the recent economic slowdown. But a drop in the demand of residential houses is a major concern in the industry.
Abdoola has said the Botswana property market experienced varied challenges with some sectors performing better than the others. Reporting on the performance of Turnstar during the year 2016, the Managign Director said during the past year, the industrial sector continued to be stronger than the other market segments.
He indicated that the commercial office space has been the most challenged with a high number of commercial properties being introduced to the market, especially in the Central Business District (CBD) during the past years. “The drop in demand for residential housing is a major concern,” he emphasised.
Abdoola says many new retail malls are in the pipeline and it will be a challenge for existing malls and the new entrants to share the same “pie”. However, he points out that Turstar’s property portfolio shows attractive future prospects supported by strong underlying contractual cash flows, escalations and a healthy lease expiry profile.
“Turnstar’s portfolio has limited exposure to the Botswana office sector, which is currently in a state of oversupply. The group has exposure of 75% by value, and 72% by GLA, to the retail sector which is mainly comprised of large listed or large national companies,”he writes in his report. He says the portfolio has a healthy lease expiry profile. Approx. 53% of leases expire in 2019 and beyond (by GLA). The leases expiring in 2017 and 2018 are routine renewals and the vast majority of them will be renewed at current market terms.
Abdoola reflects on 2016 and points out “This has been both, a sad and prosperous year for Turnstar. On the 27th November 2015, our Chairman, Mr Cuthbert Moshe Lekaukau passed away. Mr Lekaukau was the Chairman of Turnstar from its inception. His dedication and wise counsel was invaluable and his passing has left a void. He is missed by the entire Turnstar team. The Board is currently evaluating various options to fill the Chairman’s position.”
The Turnstar Managing Director is however pleased that the Company performed extremely well as is evidenced by the results. He points out that the Tanzanian subsidiary, Mlimani Holdings is becoming more significant each year, in terms of contribution to the Group. The BWP/USD exchange rate is also a favourable factor. “At Mlimani, the bulk land has appreciated significantly, and this is reflected in fair value gains.”
Turning to one of their star malls in Gaborone, Abdoola says the construction work at Game City is nearing completion. He observes that it has been extremely difficult to construct and carry out renovations to an operating mall. “We have and continue to do everything possible to minimise the disturbance and inconvenience and are thankful for the cooperation of tenants and customers. However, we assure you that the improvements will be well worth the wait and inconvenience. Mlimani City construction is also well underway and is scheduled to be completed by the end of this year,” he says.
Turnstar is currently in the process of carrying out a feasibility exercise on the hotel project at Mlimani and will reach a decision on its viability, shortly. Turnstar intends issuing a USD 30 million, 7 year convertible bond in the market. These funds will be raised to fund the construction of the Mlimani City developments. This form of funding should boost the profitability and cash flow of Turnstar.
Abdoola says Africa still remains to be further explored for opportunity, and they are very keen to look at countries they believe they can do business in. “Several Organisations and Governments are in discussions with us to consider various developments. Mlimani Holdings has a proven track record and has turned out to be a successful story in terms of profitable partnerships. However, we maintain a conservative approach and will undertake projects which are within the capacity of Turstar.”
The Group continued to post pleasing results for the year, despite challenging market conditions. “The share price has performed beyond expectations and we are very pleased that the value in Turnstar is now being recognised.” According to Abdoola, Turnstar remained the most diversified property Company on the BSE with property assets valued at over P2 bn. The Group’s Tanzanian subsidiary, Mlimani Holdings Limited, generates US Dollar revenue. Turnstar is a fully integrated internally managed property company, employing 125 staff.
Group revenue increased by 5% from the prior year, to P247.6M. The rental income from the Company’s Botswana portfolio decreased by 4.2% due to the sale of Fairgrounds office park property, whilst the rental income from the Tanzanian portfolio increased by 16.7%. Approx. 49% of the Group’s total rental income, is in US Dollars.
Tanzania continues to be one of the fastest growing economies in sub Saharan Africa. The economic growth is spearheaded in the Gas, petroleum, mining, tourism, agriculture and manufacturing sectors. The retail and industrial property sectors in particular are flourishing. The Government is focussed on growing the economy and welcomes foreign investment.
Lucrative and highly anticipated national lottery tender that saw several Batswana businessmen partnering to form a gambling consortium to pit against their South African counterparts, culminates into a big power gamble.
WeekendPost has had a chance to watch lottery showcase even before the anticipated and impending national lottery set-up launches. A lot has been a big gamble from the bidding process which is now set for the courts next year January following a marathon legal brawl involving the interest of the gambling fraternity in Botswana and South Africa.
Households representing more than half of Botswana’s population-mostly residing in rural areas- do not know where their next meal will come from, but neither do they take into consideration the quality and/or quantity of the food they consume.
This is according to the latest Prevalence of Food Insecurity in Botswana report which was done for the 2018/19 period and represents the state of food insecurity data even to this time. The Prevalence of Food Insecurity was released by Statistics Botswana and it released results with findings that the results show that at national level 50.8 percent of the population in Botswana was affected by moderate to severe food insecurity in 2018/19, while 22.2 percent of the population was affected by severe food insecurity only.
According to the report, this translates to 27 percent of the population being food secure that is to say having adequate access to food in both quality and quantity. According to Statistician General, Burton Mguni, when explaining how the food data was compiled, Food and Agriculture Organization of the United Nations (FAO), is custodian of the “Prevalence of Undernourishment (PoU)” and “Prevalence of moderate or severe food insecurity in the population based on the Food Insecurity Experience Scale (FIES)” SDG indicators, for leading FIES data analysis and the resultant capacity building.
“The FIES measures the extent of food insecurity at the household or individual level. The indicator provides internationally comparable estimates of the proportion of the population facing moderate to severe difficulties in accessing food. The FIES consists of eight brief questions regarding access to adequate food, and the questions are answered directly with a yes/no response. It (FIES) complements the existing food and nutrition security indicators such as Prevalence of Undernourishment.
According to the FIES, with increasing severity, the quantity of food consumed decreases as portion sizes are reduced and meals are skipped. At its most severe level, people are forced to go without eating for a day or more. The scale further reveals that the household’s experience of food insecurity may be characterized by uncertainty and anxiety regarding food access and compromising the quality of the diet and having a less balanced and more monotonous diet,” says Mguni.
The 50.8 percent of the population in Botswana which was affected by moderate to severe food insecurity are characterized as people experiencing moderate food insecurity and face uncertainties about their ability to obtain food. These people have been forced to compromise on the quality and/or quantity of the food they consume according to the report on food insecurity.
Those who experience severe food insecurity, the 22.2 percent of the population, are people who have typically run out of food and, at worst, gone a day (or days) without eating. According to the statistics, rural area population experienced moderate to severe food insecurity at 65 percent while urban villages were at 46.60 percent and cities/town were at 31.70 percent. Those experiencing the most extreme and severe insecurity were at rural areas making 33.10 percent while urban villages and towns were at 11.90 percent and 17.50 respectively.
According to a paper compiled by Sirak Bahta, Francis Wanyoike, Hikuepi Katjiuongua and Davis Marumo and published in December 2017, titled ‘Characterization of food security and consumption patterns among smallholder livestock farmers in Botswana,’ over 70 percent of Botswana’s population reside in rural areas, and majority (70%) relies on traditional/subsistence agriculture for their livelihoods.
The study set out to characterize the food security situation and food consumption patterns among livestock keepers in Botswana. “Despite the policy change, challenges still remain in ensuring that all persons and households have access to food at all times. For example, during an analysis of the impacts of rising international food prices for Botswana, BIDPA reported that food prices tended to be highest in the rural areas already disadvantaged by relatively low levels of income and high rates of unemployment,” said the study.
According to the paper, about 9 percent of households were found to be food insecure and this category of households included 6 percent of households that ranked poorly and 3 percent that were on the borderline according to the World Food Programme’s (WFP) definition of food security.
Media reports state that the World Bank has warned that disruption to production and supply chains could ‘spark a food security crisis’ in Africa, forecasting a fall in farm production of up to 7 percent, if there are restrictions to trade, and a 25 percent decline in food imports.
Food security in Botswana or food production was also attacked by the locust pandemic which swept out this country’s vegetation and plants. The locust is said to have contributed to 25 percent loss in production.
Global lockdown have been a thorn in diamonds having shiny sales, but a lot of optimism shows with the easing of Covid-19 restrictions, the precious stones will be bought with high volumes towards festive season. The diamond market is however warned of the resurgence of Covid-19 in key markets presents ongoing risks amid the presence and optimist about the new Covid-29 vaccines.
The latest findings published as De Beers Group’s latest Diamond Insight ‘Flash’ Report, which looks at the impact of the pandemic on relationships and engagements, has revealed that in the US that more couples than ever are buying diamond engagement rings. Bridal sales is mostly the primary source of diamond jewellery demand in recent months, De Beers said.
According to De Beers, interviews with independent jewellers around the US revealed that the rate of couples getting engaged has increased compared with the period when Covid-19 first had an impact in the US in the spring.
“In addition, despite challenging economic times, consumers were spending more than ever on diamond engagement rings – often upgrading in colour, cut and clarity, rather than size. Several jewellers speculated that with consumers spending less on elaborate weddings and/or honeymoons in the current environment, they had more to spend on choosing the perfect ring,” said De Beers.
According to De Beers, a national survey of 360 US women in serious relationships, undertaken in late October in collaboration with engagement and wedding website, The Knot. This survey is said to have found that the majority of respondents (54%) were thinking more about their engagement ring than the wedding itself (32%) or the honeymoon (15%), supporting jewellers’ hypothesis that engagement ring sales were benefiting from reduced wedding and travel budgets in light of Covid-19 restrictions.
When it came to researching engagement rings, online was by far the predominant channel for gaining ideas/inspiration at 86% of consumers surveyed, with 85% saying they had saved examples of styles they liked, according to De Beers. According to the survey, only a uarter of respondents said they had looked in-store at a physical location for design inspiration.
“For many couples, the pandemic has brought them even closer together, in some instances speeding up the path to engagement after forming a deeper connection while experiencing lockdown and its associated ups and downs as a partnership. Engagement rings are taking on even greater symbolism in this environment, with retailers reporting couples are prepared to invest more than usual, particularly due to budget reductions in other areas,” De Beers CEO Cleaver said.
According to De Beers Group, its Diamond Insight Flash Report series is focused on understanding the US consumer perspective in light of Covid-19 and monitoring how it evolves as the crisis evolves. Also, the company said, it is augmenting its existing research programme with additional consumer, retailer and supply chain touch-basis to understand the pain points and the opportunities for stakeholders across the diamond pipeline.
Demand for diamonds is as hard and resilient as the precious stone itself. De Beers pocketed US$ 450 million in its recently held ninth rough diamond sales cycle, and the company says it is more flexible approach to rough diamond sales during the ninth sales cycle of 2020, with the Sight event extended beyond its normal week-long duration.
“Steady demand for De Beers Group’s rough diamonds continued in the ninth sales cycle of the year, reflecting stable consumer demand for diamond jewellery at the retail level in the US and China, and expectations for reasonable demand to continue throughout the holiday season. However, the resurgence of Covid-19 infections in several consumer markets presents ongoing risks,” said De Beers CEO Bruce Cleaver recently.
High expectations are on diamonds being a sentimental gift for holiday season or as the most fetished gift. However the ninth cycle was lower than the eighth which registered US$ 467 million. For the last year period which corresponds with the current one, De Beers managed to raise US$ 400.