The closure of BCL Mine has affected New African Properties’ (NAP) portfolio in Selebi-Phikwe resulting in an increase in both vacancies and rental arrears.
Commenting on the group’s financial results for the year ended July 31, 2017, the group chief executive officer (CEO) Tobias Mynhardt said they had exposure in Selebi-Phikwe, which has been impacted by the closure of the BCL in October last year.
The exposure to Selebi-Phikwe is 2.7% of the total property value and 3.4% of total rental at year-end.
“There has been an increase in both vacancies and arrears due to this and management is actively managing the affected properties to mitigate the impact as best as possible,” he said.
The tenant composition as at year-end was 53% listed and multi-national companies, one percent national, nine percent government and the balance of 37% smaller tenants.
Vacancies increased from 1.2% to 3.2% during the year and amount to 4,139 metres square at year-end of which 424 metres square has subsequently been let. Selebi-Phikwe properties account for 1,124 square metres, a 27% of total vacancies at year-end. According to the CEO, unprovided tenant arrears amounted to P0.4 million at the end of the year with a net charge to distributable income of P0.3 million.
He said subsequent to the year end the company entered into an agreement to acquire property, which is still conditional on the completion of a number of conditions precedent.
“The BSE has classified it as a category 4 transaction and if successfully concluded, would have a negligible impact on net asset value while the impact on distributable income would not be material, which is defined as being less than three percent in terms of the BSE listing requirements,” he said.
The group’s property portfolio comprises predominately Botswana retail properties with a wide geographical footprint and a weighting to Gaborone. The quality and diversity of tenants occupying the properties are a key factor in NAP’s performance.
Mynhardt said that at year-end, properties were occupied in terms of 474 leases with 55% of rentals flowing from listed and multinational companies.
“Operationally the property portfolio key performance indicators of vacancies, rent collection and leasing continue to reflect solid performance,” he said.
He said by year-end, management had renewed 85% by value of leases expiring during the year at an average increase inline with normal escalations.
The group recorded P199.4 million profit for the year, a P10.4 million decrease than the P209.8 million-recorded last year.