New mall brave attempt to breathe life into Lobatse
Once one of the most prominent and respectable metropolitan towns in the colonial era, with architectural designs to ravel visitors, Lobatse was the hub of growth and development. Colonizers invested in it, built it and became a vocal point of trade.
Such was the case of Lobatse; a legendary 123 year old town which was nearly made this country’s capital city, failed to hang onto the economic value of the 66 year old beef abattoir that was built by Botswana’s colonial master, subsequently becoming a ghost town. One of the reasons why Lobatse died is because the beef abattoir, now known as Botswana Meat Commission (BMC), is not doing well financially and its workers left the town more than a decade ago leaving the economic status of the town moribund.
But someone has hope that the town of Lobatse will somehow revive and become what the colonialists had in mind more than a century ago. A daring and brave property investment company; Prime Time is building a P116 million mall in Lobatse at Lot 14076, situated at the town’s main bus terminal. The shopping mall is to be known as Lobatse Junction mall.
According to Botswana Stock Exchange listed Prime Time, it has found a niche in a town which has never seen new shopping centre buildings for 15 years. Lobatse holds a small population of close to 30 000, but Prime Time is hopeful that, “a steady stream of traffic passing through it as a border town (border to economic giant and biggest trading partner to Botswana, South Africa) and its position on the A1 as strategic.
“Current retail provision is concentrated in a few small malls, stand-alone units and traditional high street retail. Existing offerings are therefore generally dated with tenants holding onto premises due to a lack of other options in the market. New entrants to the Lobatse market are also frustrated by a lack of available premises,” said Prime Time justifying the idea of a mall in Lobatse and why it should be in high demand.
But this was not the first time the company invested in Lobatse and its first investment never lived up to expectations as it seemed to be swallowed or overshadowed by the ghost town. According to Prime Time, the Hillside Mall property is currently subject to a shortening ground lease and will diminish in value as the lease runs down. However, according to Prime Time, Lobatse Junction mall acquisition will protect the company’s position as a major player in the retail market in Lobatse.
According to independent valuer Benedict Kgosilentswe who valued the mall property on 13 September 2019, the 4.4204 Ha land is going to be developed with a shopping complex measuring approximately 8,805 m2. Prime Time said the property measures 4.42 hectares and is held on a 30-year lease from Lobatse Town Council with an option to renew for a period of a further 30 years. According to Kgosilentswe, the land use specifies “Mixed Use (Commercial and Civic and Community)”.
“Spar will be the anchor tenant to occupy about 1,900m2, the promoter/developer will also sign up a mixture of National and South African National stores. At the time of our survey, construction of the mall had not yet commenced,” said Kgosilentswe, a Chartered Surveyor with more than 20 years’ experience undertaking valuations of fixed property assets, commercial property valuation, agency and consultancy.
Tenants expected to join major tenant Spar are; Botswana Life, BBS, Ackermans, PEP, Jet, Clicks and Bradlows. “The proposed shopping complex will comprise a parade of 30 retail units, 10 kiosks, 15 small informal traders’ kiosks, 20 larger informal traders’ kiosks and two ATM kiosks to have 263 surface car parking bays, 14 bicycle parking bays,” said Kgosilentswe.
“I have inspected signed leases and expressions of interest and can confirm tenant demand for leasing space at the property has been exceptionally strong. The majority of interest from tenants is from regional and national players which will provide a secure income stream,” said Kgosilentswe. Kgosilentswe said Lobatse lacks high quality retail provision which will be addressed by Lobatse Junction. He said the mall is excellently located and will benefit from the busy traffic created by the bus and railway stations.
The valuer of Lobatse Junction mall also said Time Projects is providing Prime Time with a rental guarantee of 8 percent which will protect the company’s return on investment during the centre’s first year of operation, which can often be turbulent as tenants bed down.
Prime Time Linked Unitholders, who holds more than 5 percent of the issued Linked Units are Botswana Public Officers Pension Fund (BPOPF) with 77,621,910 units which is 31.72 percent, Linwood Services with 16. 36 percent, Tati Company with 22, 873, 86 which is 9.35 percent and Debswana Pension Fund with 7.99 percent.
Primetime Unitholders to be paid 8.32 thebe on March
For the year ended 31 August 2019 Primetime had final interest distribution comprising of interest of 2.00 thebe per linked unit and it has been declared payable. The 2.00 thebe declared last year will be added into an interim interest distribution comprising interest of 6.32 thebe per linked unit in respect of the year ended 31 August 2020 (covering the 4-month period to 31 December 2019) which has been declared payable. Next month on the 23th unitholders will be paid a total of 8.32 thebe per linked unit (gross).
Linked unitholders or investors have been told that the company has started road shows to institutional investors regarding a fund raising through a rights issue and issuance of further debt instruments under the Company’s existing domestic medium term bond programme. According to Primetime’s latest cautionary announcement, the company is raising funds “to support its continuing growth strategy.”
Business
LLR transforms from Company to Group reporting
Botswana Stock Exchange listed diversified real estate company, Letlole La Rona Limited (“LLR” or “the Company” or “the Group”), posted its first set of group financial statements which comprise the Company and Group consolidated accounts, which show strong financial performance for the six months ended 31 December 2023, with improvements across all key metrics.
The Company commenced the financial year with the appointment of a Deputy Chairperson, Mr Mooketsi Maphane, in order to bolster its governance and enhance leadership continuity through the development of a Board and Executive Management Succession Plan.
At operational level, LLR increased its shareholding in Railpark Mall from 32.79% to 57.79% and proudly took over the management of this prime asset.
The CEO of LLR, Ms Kamogelo Mowaneng commented “During the period under review, our portfolio continued to perform strongly, with improvements across all key metrics as a result of our ongoing focus on portfolio growth and optimisation.
“We are pleased to report a successful first half of the 2024 financial year, where we managed to not only grow the portfolio through strategic acquisitions and value accretive refurbishments but also recycled capital through the disposal of Moedi House as well as the ongoing sale of section titles at Red Square Apartments. The acquisition of an additional 25% stake in JTTM Properties significantly uplifted the value of our investment portfolio to P2.0 billion at a Group level. Our investment portfolio was further differentiated by the quality of our tenant base, as demonstrated by above market occupancy levels of 99.15% and strong collections of above 100% for the period”.
The growth in contractual revenue of 9% from the prior year’s P48.0 million to the current year P52.2 million, increased income from Railpark Mall, coupled with high collection rates, has enabled the company to declare a distribution of 9.11 thebe per linked unit, which is in line with the prior year.
In line with its strategic pillars of ‘Streamlined and Expanded Botswana Portfolio’ as well as ‘Quality African Assets’, the Group continuously monitors the performance of its investments to ensure that they meet the targeted returns.
“The Group continues to explore yield accretive opportunities for balance sheet growth and funding options that can be deployed to finance that growth” further commented the CEO of LLR Ms Kamogelo Mowaneng.
Ms Mowaneng further thanked the Group’s stakeholders for their continued support and stated that they look forward to unlocking further value in the Group.
Business
Botswana’s Electricity Generation Dips 26.4%
The Botswana Power Corporation (BPC) has reported a significant decrease in electricity generation for the fourth quarter of 2023, with output plummeting by 26.4%. This decline is primarily attributed to operational difficulties at the Morupule B power plant, as per the latest Botswana Index of Electricity Generation (IEG) released recently.
Local electricity production saw a drastic reduction, falling from 889,535 MWH in the third quarter of 2023 to 654,312 MWH in the period under review. This substantial decrease is largely due to the operational challenges at the Morupule B power plant. Consequently, the need for imported electricity surged by 35.6% (136,243 MWH) from 382,426 MWH in the third quarter to 518,669 MWH in the fourth quarter. This increase was necessitated by the need to compensate for the shortfall in locally generated electricity.
Zambia Electricity Supply Corporation Limited (ZESCO) was the principal supplier of imported electricity, accounting for 43.1% of total electricity imports during the fourth quarter of 2023. Eskom followed with 21.8%, while the remaining 12.1, 10.3, 8.6, and 4.2% were sourced from Electricidade de Mozambique (EDM), Southern African Power Pool (SAPP), Nampower, and Cross-border electricity markets, respectively. Cross-border electricity markets involve the supply of electricity to towns and villages along the border from neighboring countries such as Namibia and Zambia.
Distributed electricity exhibited a decrease of 7.8% (98,980 MWH), dropping from 1,271,961 MWH in the third quarter of 2023 to 1,172,981 MWH in the review quarter.
Electricity generated locally contributed 55.8% to the electricity distributed during the fourth quarter of 2023, a decrease from the 74.5% contribution in the same quarter of the previous year. This signifies a decrease of 18.7 percentage points. The quarter-on-quarter comparison shows that the contribution of locally generated electricity to the distributed electricity fell by 14.2 percentage points, from 69.9% in the third quarter of 2023 to 55.8% in the fourth quarter. The Morupule A and B power stations accounted for 90.4% of the electricity generated during the fourth quarter of 2023, while Matshelagabedi and Orapa emergency power plants contributed the remaining 5.9 and 3.7% respectively.
The year-on-year analysis reveals some improvement in local electricity generation. The year-on-year perspective shows that the amount of distributed electricity increased by 8.2% (88,781 MWH), from 1,084,200 MWH in the fourth quarter of 2022 to 1,172,981 MWH in the current quarter. The trend of the Index of Electricity Generation from the first quarter of 2013 to the fourth quarter of 2023 indicates an improvement in local electricity generation, despite fluctuations.
The year-on-year analysis also reveals a downward trend in the physical volume of imported electricity. The trend in the physical volume of imported electricity from the first quarter of 2013 to the fourth quarter of 2023 shows a downward trend, indicating the country’s continued effort to generate adequate electricity to meet domestic demand, has led to the decreased reliance on electricity imports.
In response to the need to increase local generation and reduce power imports, the government has initiated a new National Energy Policy. This policy is aimed at guiding the management and development of Botswana’s energy sector and encouraging investment in new and renewable energy. In the policy document, Minister of Mineral Resources, Green Technology and Energy Security Lefoko Moagi stated that the policy aims to transform Botswana from being a net energy importer to a self-sufficient nation with surplus energy for export into the region. Moagi expressed confidence that Botswana has the potential to achieve self-sufficiency in electric power supply, given the country’s readily available energy resources such as coal and renewable sources.
Business
MMG acquires Khoemacau in a transaction valued at P23Bn
MMG Limited, the Hong Kong-based mining company specializing in base metals, has successfully concluded the acquisition of Khoemacau Copper Mine, a state-of-the-art, world-class copper asset nestled in the northwest of Botswana.
On Monday, MMG announced that the acquisition of Khoemacau Mine in Botswana was finalized on 22nd March 2024. “This acquisition enriches the company’s portfolio with a top-tier, transformative growth project and signifies a monumental milestone in the Company’s journey,” MMG communicated in an official statement published on the Hong Kong Stock Exchange.
Upon completion of the acquisition, MMG remitted to the Sellers an Aggregate Consideration of approximately US$1,734,657,000 (over P23 billion), a sum subject to potential adjustments post-Completion.
In addition to the Aggregate Consideration, MMG, in accordance with the Agreement, advanced an aggregate amount of approximately US$348,580,000 (over P4.5 billion) as the Aggregate Debt Settlement Amount, to settle certain debt balances of the Target Group (Cuprous Capital/Khoemacau).
On November 21, 2023, Khoemacau announced that the shareholders of its parent company [Cuprous Capital] had agreed to sell 100% of their interests to MMG Limited.
MMG is a global resources company that mines, explores, and develops copper and other base metals projects on four continents. The company is headquartered in Melbourne, Australia, and has a significant shareholder, China Minmetals Corporation, which is China’s largest metals and minerals group owned by the Government of the People’s Republic of China.
On December 22, 2023, Khoemacau Copper Mining (Pty) Ltd received the approval from the Minister of Minerals and Energy of Botswana regarding the transfer of a controlling interest in the Project Licenses and Prospecting Licenses associated with the Khoemacau Copper Mine, a result of the Acquisition.
The Botswana Competition & Consumer Authority (CCA) on January 29, 2024, notified the market that it had given its approval for the takeover of Khoemacau Copper Mining by MMG Limited.
On January 29, 2024, the CCA issued a merger decision to the market, stating that after conducting all necessary assessments, it was ready to proceed.
The Competition Authority affirmed that the structure of the relevant market would not significantly change upon implementation of the proposed merger as the proposed transaction is not likely to result in a substantial lessening of competition, nor endanger the continuity of service in the market of mining of copper and silver ores and the production, and sale or supply of copper concentrate in Botswana.
Furthermore, the CCA stated that the proposed merger would not have any negative impact on public interest matters in Botswana as per the provisions of section 52(2) of the Competition Act 2018.
Earlier this month, Minister of Minerals & Energy, Lefoko Maxwell Moagi, informed parliament that his Ministry was endorsing the Khoemacau acquisition by MMG Limited. He noted that not only was the company acquiring the existing operation but also committing to an expansion program that would cost over $700 million to double production, create more jobs for Batswana, and increase taxes and royalties paid to the Government.