PrimeTime seeks to increase portfolio
Keikantse Lesemela | Friday January 9, 2015 15:38
It will be boosted by its debt leverage model of P300 million in the next 18 months.
In the financial year ended 31 August 2014, the company’s portfolio value increased to P732 million from P544 million in 2013 as a result of the addition of three new properties in the Prime Plaza.
The company’s debt ratio stood at P295 million at the end of 2014 financial year, amounting to 40 percent of their portfolio value.
In its 2014 annual report, PrimeTime managing director Sandy Kelly said the strategy would help them reach over P1 billion portfolio value by 2016 and a debt ratio value of 60 percent.
“While this may well mean a slight decline in distribution in the short and medium term, long term shareholder wealth should be enhanced,” he said. Kelly further said they had already identified growth opportunities within Botswana and other countries.
He added that they were shifting focus to retail market growth opportunities in towns and villages outside Gaborone, due to the saturation in the retail property industry within the city.
Kelly noted that although the Botswana property industry was struggling economically, they continued to perform well.
“Our properties continue to perform well. We have minimal vacancies and negligible bad debts due to our properties both in their development and location,” he said.
However, due to the market saturation retail property owners are seeing little growth, which translates into minimal rental escalation. Recently the industry has seen reduced disposable income, in rural areas and towns outside Gaborone.
Kelly said it was important for PrimeTime to diversify its investments outside of Botswana to mitigate possible negative effects of the single product economy.
“Sub Saharan Africa presents excellent opportunities as it is widely considered to be one of the world’s growth regions for the next few years to come, it is a good story out there,” he said.
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 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 at Marula House.
The annual revaluation of the property portfolio by independent valuer, Knight Frank, including new acquisitions, has shown a five percent increase of P39 million over the prior year values.