RDC looks outside Botswana for growth
Staff Writer | Wednesday August 16, 2017 16:09
Announcing results for the half-year ended June 30, 2017 in Gaborone yesterday, RDC executive chairman Guido Giachetti said the local property market is going through challenging times but the downturn was plugged by good performance in the properties in the tourism industry.
This resulted in an increase in profit and rental income with focus now placed on growing its residential property portfolio as well as new acquisitions in the region.
“Profit from operations increased by six percent to P31.4 million with rental income up five percent to P43.9 million despite challenging trading conditions in the commercial property market. Profit before tax increased by eight percent to P28.3 million. The growth in rental income was through solid rental renewals and lease escalations, as well as the exceptional performance of Chobe Marina Lodge in Kasane, where the lease is linked to the revenue of the lodge,” Giachetti said.
Although the key tourism areas in Botswana are performing well, Giachetti said the Gaborone hospitality market has been under pressure which has impacted on the revenues of the Masa Square Hotel.
“Despite tough trading conditions, Masa Square Hotel continues to be a destination of choice for travellers to the city, with the hotel being the top of its peer set when it comes to occupancies and revenue per available room,” he added.
In the period, RDC registered significant growth in the property portfolio which now stands at P1.260 billion up 12% from P1.124 billion.
The company owns properties in Botswana ranging from office, retail, industrial and residential.
RDC’s recently opened Gaborone West industrial warehouses have also contributed to the growth in revenue as they are fully occupied in 2017 compared to last year when the units were being completed.
Extension of the ICC Flats in Extension 9, Gaborone, is well on track, which will see 45 new apartments on offer when the project is complete in the second quarter of 2018.
“Management continues to focus its attention on the regional diversification, whilst not forgetting the local market as stated previously. In South Africa, we are engaged in negotiations which would lead to the acquisition of a controlling stake in a portfolio of properties in the Western Cape area,” he said.
In Namibia, RDC is expecting to initiate construction on three convenience centres within the next six months. The centres are located in Katima Mulilo, Tsumeb and Grootfontein.
In Mozambique, Giachetti said they have obtained central bank approval for the funding of the Xai Xai project and will commence with the construction works very shortly.
“All the structures are in place now for the project in Zimpeto, Maputo and we will hopefully have the central bank approvals shortly too. The Board is fully supporting management’s plans and provides the overarching supervision for our regional expansion,” he said.
The company is currently trading on a cautionary statement on the Botswana Stock Exchange saying it is in negotiations to further expand its property portfolio outside Botswana.