PrimeTime seeks P135 million to develop new properties

Brian Benza
Staff Writer | Wednesday April 28, 2010 00:00

In a statement released this week, PrimeTime, which has properties ranging from retail, industrial and office, says that their related company Time Projects, has tendered the two properties to them.  

The company says it is going to borrow P100 million to develop a shopping complex, Sebele Centre, in Gaborone's Block 10 area. PrimeTime will purchase the piece of land from a 50 percent owned subsidiary of Time Projects. 'Primetime will then enter into a development agreement with Time Projects, to build a shopping centre on the land, with an estimated cost of P 100m for both the cost of the land and the development,' read the statement. In the second project, the company will contract to purchase 75 percent of a plot of land in the Central Business District in Gaborone, which is owned by a 100 percent non-trading subsidiary of Time Projects.

'The company will then enter into a development agreement with Time Projects to build the first of a possible three buildings on the land, at an estimated cost of P 35 million. 'Both developments are to be funded by way of debt, and negotiations are said to be currently on-going with financial institutions,' says PrimeTime. The two properties will add to Primetime's already flourishing portfolio which include, United Nations House, South Africa High Commission, Capricorn House, AFA House, Barclays Plaza, and Blue Jacket Square.

Meanwhile, the company this week also released its interim results for the six months period ended 28 February 2010 in which it reported a 15.9 percent year on year decline in Earnings Per Linked Units (EPLU) to P 0.09.

Revenue increased slightly by 3.8 percent to P 19.2 million, providing a rental yield of 7.8 percent for the period.The investment property grew by 6.9 percent to P 253.7 million. Other operating income and operating expenses increased by 22.7 percent to P 1.7 million and 13.8 percent to P 5.7 million respectively. As a result, operating profit increased marginally by 2.2 percent to P 15.2 million while interest income grew by 15.4 percent to P 260,655, owing to the company's debt-free balance sheet.

The company believes that the underlying value of the properties will see a substantial appreciation at year-end, as investors are clambering for solid income-producing assets such as property. ' The major development during the reporting period was the United Nations terminating its lease in order to move to the old SADC building. Their new space was immediately let to Letshego and the building will be renamed Letshego House,' said the company.

Profit before tax increased by 2.4 percent to P15.5 million, while profit after tax plunged 15.9 percent to P 15.3 million. Listed on the Botswana Stock Exchange in December 2007, PrimeTime has since then established itself as a preferred property investment vehicle for institutions and private investors alike, with the number of shareholders growing from 1337 on listing to over 1480 currently.

The acquisition of the three Tati Company properties in Francistown in 2008 also provided a solid foothold in the north, with good diversity in the city. The company says it also believes that with the recent reductions in interest rates in Botswana, PrimeTime's yield of over 10 percent makes it an extremely attractive investment compared with bank deposit & bond rates of 7 percent.