The Botswana Stock Exchange (BSE) listed property concern RDC Properties says its new project - Masa Towers - in the new Gaborone Central Business District (CBD) is estimated to cost P275 million by the time of its opening around May 2010.
The building, which comprises retail, office space as well as a 157-room hotel, is one of the many properties currently being developed in the new CBD area.
Speaking at the release of the company's unaudited six-month results to June 30, 2008 in Gaborone last Thursday, group managing director Guido Giachetti said the Masa Towers project, whose civil and building contract has already been tendered, is set to diversify the company's portfolio, which has been skewed towards office properties.
"Following a re-engineering of the project to reduce costs the contract to build the property was eventually awarded at a cost of P197 million after having received tenders as high as P294 million from contractors.
"The property has been designed as a mixed-use development with a combination of specialised retail, restaurants and 'A' grade offices. We are pleased to report that a lease has been concluded with African Sun Limited (ASL), a large hotel group operating very well known hotels," he said.
ASL is the holder of the intercontinental Brand Franchise for Botswana and intends branding the hotel as Holiday Inn and will be investing substantially in the hotel operation.
The project will be financed through a combination of long term paper as well selling of other properties. Apart from the CBD project, in which they are in a 50-50 percent each partnership with another property development company, RDC is also developing the Isalo Rock Lodge in Madagascar.
Giachetti added that the construction of the lodge
For the six months ended June 30, RDC 's group gross income recorded a growth of 19.5 percent from P11.447 million to P13.7 million while net profit before debenture interest from operations rose from P5.92 million to P8.115 million.
"We are also happy to report a significant increase in distribution to linked unit holders, 21.51 percent, due to the combined effect of reduction in finance costs and the increase of the turnover," he added.
Listed on the BSE in 1992, RDC owns properties in different parts of the country including Jwaneng, Maun, Kasane, Palapye, Serowe, and Gaborone.
The company's investment portfolio is currently worth around P190 million. Giachetti believes that the property sector in the country is performing well and it is therefore not surprising that the sector has outperformed the mainstream index on the BSE, the DCI.
" In spite of a turbulent property sector in most parts of the world, the Botswana market is currently performing very well as a reflection of the high levels of confidence in the economy.
" The latest increase in interest rates, as a measure to control inflation, has resulted in Botswana 's highest ever prime rate, which will affect the level of growth and new developments.
"The company is trying to mitigate this through alternative ways of financing its growth," he said.