PrimeTime targets out of Gaborone retail market

Keikantse Lesemela | Wednesday November 26, 2014 16:40

 

Presenting the company’s financial results for the year ended August 31, 2014 in Gaborone yesterday, PrimeTime managing director, Sandy Kelly, said although the retail market was saturated in many towns in Botswana there were growth opportunities in outlying areas such as Palapye, Mahalapye and Mochudi/Pilane.

“Now that Prime Plaza is complete we are evaluating other investment opportunities both in the Gaborone CBD and other outlying areas,” said Kelly.

The company’s investment property value stands at P732 million for the financial year ended 31 August 2014, compared to P544 million in 2013. 

PrimeTime currently owns the Sebele and South Ring shopping malls in Gaborone, Nswazwi mall in Francistown as well as shopping centres in Ghanzi, Lobatse, Serowe and Ramotswa. PrimeTime now owns three buildings within Prime Plaza in the CBD comprised of Barclays House, Marula House and CEDA House. Kelly said the Prime Plaza location had attracted an equal caliber of tenants with Cresta, Stockbrokers Botswana, South Africa Express Airline and GIZ already renting out at Marula House.

“PrimeTime has forged a further beneficial alliance with them by securing a large portion of the funding for a final building on the site from them,” he said.

He also said PrimeTime had continued with its planned major refurbishment schedule projects in 2014, which had cost the company about P1.8 million.

“It is vital for PrimeTime to keep its properties relevant to market demand in order to ensure tenancies,” he said.

Refurbishments to Letshego Place in the Main mall, which cost a tune of P2 million, were completed last year.

Although the company has seen a 35 percent increase in portfolio growth, Kelly said the challenging economic conditions still persisted. He added that the situation impacted the viability of some tenants and the availability of suitable bank finance.

Operating revenue for the year increased from P69.5 million-recorded last year to P75.9 million in 2014.  After tax profit for the year stands at P65.3 million compared to P43 million-recorded last year.  In the financial year, three new properties have been added to the portfolio at a cost of P149 million bringing the total number of properties to 24.

Kelly said the profits distributed remain flat due to the debt servicing and minor improvements paid from profits. “This is a result of our core strategies of improvement of existing properties, growth and diversification (both sectoral and geographical),” he said. 

Kelly added that at the year-end PrimeTime portfolio was valued at P732m with outstanding borrowings of P295m.   “This gives us scope for our next stage of debt leveraged growth of about P300m. This will take our portfolio value to over P1 billion. We target to achieve this in the next 18 months,” he said.