RDC enters residential property market
Pauline Dikuelo | Wednesday August 13, 2014 09:13
When presenting their half-year results of up to June 2014, managing director Jacob Pari said they were currently working on the feasibility study for the development of 108 apartments at an identified plot in Tlokweng.
The apartments will comprise of one and two bedroomed lofts with terraces, parking and recreational areas. He explained that the designs are currently at an advanced stage.
“The industrial and residential developments continues to yield impressive results with an increase total returns up to 21.4 percent for the year 2013,” Pari said.
With returns in office and retail market constrained, property developers are now eyeing the industrial and residential properties for investment opportunities.
According to the 2014 International Property Databank (IPD) Report, the top-performing sector for 2013 was industrial property, followed by residential and retail. The industrial sector outperformed as a result of superior income return and a solid capital growth of 13.5%. The residential market had an outstanding year, mainly in terms of capital growth and delivered a total return of 24.4%, although the income return of 4.1% was relatively low.
The office sector underperformed relative to the other sectors, largely as a result of vacancy rates increasing from 1.9% to 5.9%. Rental growth was low at 4.3% and capital growth also underperformed at 5.6%.
According to Pari, RDC has also commenced the development of new warehousing units at the G-West industrial area.
“The project is well within time and budget, as it is expected to be completed by the second quarter of 2015. The high flexibility of the design was maintained to permit the subdivision of the development into smaller or larger units to meet various business needs,” he said.
Pari stated that they have aligned their new development strategies to generate both appreciable income and capital growth for the group by planning its investment around the viable sectors.
“The acquisition of Chobe Marina Lodge had a significant impact on the overall result as tourist activities in the Kasane region are now booming with the Lodge delivering excellent results.”
Despite Masa being regarded as the social hub of Gaborone, Pari said they have experienced some poor performance in the office rentals with vacancies increasing to 5.9 percent.
Property market expert Sethebe Manake recently told Mmegi Business that the office market is showing signs of distress due to over supply as rentals have softened from an average of about P95, 00 per square metre to P75, 00 per square metre.
She noted that the retail market has reached the saturation level while the industrial market is upside on the horizon as there is an increase in rental rates, demand for large industrial sites and distribution centers.
Sethebe urged people to invest in the residential market as it’s rebasing and noted an increased demand for property ownership and low-income housing.
RDC Properties are the owners of the Masa Centre, Standard House, Real Estate office park and Chobe Marina Lodge.