Turnstar warns of profit dip due to weaker property valuations
Lewanika Timothy | Wednesday April 22, 2026 06:00
In a cautionary statement to the bourse, the company attributed the decline largely to reduced fair value gains on its investment property portfolio, reflecting shifting market dynamics in Botswana’s real estate sector. “The decrease is primarily attributable to a significant reduction in fair value adjustments on investment property, with fair value gains declining by approximately P38.7 million,” Turnstar board said. Turnstar noted that the weaker valuations were driven by the application of higher discount and capitalisation rates across its Botswana assets, signalling a more cautious outlook on property income streams amid tightening financial conditions.
“This was mainly driven by higher discount and capitalisation rates applied to the Botswana property portfolio in response to prevailing market conditions,” directors added. Despite the headline drop in profitability, the group’s core operations remained largely resilient, with operating profit slipping marginally by just 0.78%, pointing to stable rental income and occupancy levels across its portfolio. “The Group’s underlying operational performance remains stable,” the board said. The development comes at a time when Botswana’s property sector is navigating a more challenging macroeconomic environment, characterised by tighter liquidity conditions, rising interest rates and softened investor appetite for real estate assets.
Higher discount rates often used to value future income streams typically reflect increased risk and reduced confidence in long-term returns, which in turn suppress property valuations and fair value gains. Turnstar, which has built a reputation as one of Botswana’s leading property developers and investors, holds a diversified with common properties like Game city mall in Gaborone alongside commercial and mixed-use developments locally and in the region. The group has previously leaned on strong fair value gains to bolster earnings, particularly during periods of robust property market growth.
However, the latest outlook suggests a normalisation phase, where earnings are increasingly tied to underlying operational performance rather than valuation uplifts. Market watchers note that while fair value adjustments can introduce volatility into reported earnings, the relatively stable operating profit signals that tenant demand and rental collections remain intact.