Botswana Housing Corporation (BHC) is finalising a new P300 million bond, proceeds of which will be used to fund the parastatal’s various developments around the country.
Currently the Corporation is engaged in the construction of 138 densification flats in Phase 4, 107 in Village and 11 in Extension 11 in Gaborone as well as 100 houses in Tati Siding, 50 in Tutume, 99 in Palapye and 18 in Tonota. The BHC is also due to build 100 houses in Maun, Letlhakane and Tsabong.
The Corporation’s CEO, Reginald Motswaiso confirmed the latest developments in an interview with BusinessWeek. “We are already in talks to float a new bond that would be used to address accommodation challenges across the country,” he said.
The new bond is part of the BHC’s P2 billion note programme under which the parastatal raises funding for its capital projects. The BHC currently has a P103 million bond listed on the Botswana Stock Exchange and set to mature in 2020. The latest bond comes as the Corporation staggers under the weight of below-market rentals and low sales. According to BHC’s last results –
Rental income, which is the Corporation’s second major revenue line, remained flat at P88 million compared to the same period in the prior year. The BHC’s rentals have not been reviewed since 2004, despite continuous appeals by the Corporation’s leadership. Currently the Corporation has a rental stock of about 10,000 units across the country, comprising low, middle and high-income houses in the forms of flats, town houses and standalone units.
New Infrastructure and Housing Development minister, Vincent Seretse conceded that the rent freeze was crippling the Corporation.
“Right now BHC properties are dilapidated due to lack of maintenance creating challenges for those who are occupying them,” he told BusinessWeek at a briefing last week.
“However, the Corporation is currently in the process of reviewing current rentals in relation to the open market and costs of maintenance.