Following the successful raising of P232.1 million from the rights issue, RDC Properties says it is in a better position to expand into the region with a specific focus on Mozambique, Namibia and South Africa.
The group’s executive chairman, Guido Giachetti said in the group’s 2015 annual report that the transaction, which was concluded in November 2015, took a lot of planning.
He noted that it was more complex than it was originally anticipated.
“However, we appreciated the overwhelming support of our institutional investors, the consulting team led by the transaction advisors and our valued chief financial officer, Grant Mori,” he said.
Giachetti expressed gratification that all linked unit holders were able to benefit from the bonus share issue, adding that the sale of the rights was a rewarding process.
He also indicated that the share price did not reduce once the bonus and rights issues were announced in August 2015, but that it actually appreciated from P2.30 to above P2.40 once the bonus and rights issue process was finalised towards the end of 2015. This, he said, was despite the additional linked units being issued at P2.25.
“Our robust portfolio of well-placed and unique hospitality properties which are creating a diversified investment portfolio is validating our strategy since their income is proving resilient to the difficult market conditions in Botswana,” said Giachetti.
According to the executive chairman, the property market in Botswana continues to be under fair pressure, and the residential sector for properties located in the centre of town seems to still be holding up.
He said the group will be starting to enhance the offering of the RDC flats by developing 45 new flats, which will be ready towards the second quarter of 2018 to complement the existing ones.
Despite the increase in supply of properties in the office sector, Giachetti said they are content that the Masa Centre is now reaching full occupancy at 99 percent, while the Standard Chartered House lease with the bank has been renewed for a further 10 years.
“The industrial sector remains fairly stable and towards the end of the year we achieved the occupation permit for our newly
He further pointed out that the tourism sector recovered towards the end of the year, despite a slow start of the year due to the Ebola virus, and that Chobe Marina Lodge ended up being the group’s third best property with the prospect of becoming the second best in the year to come.
Giachetti said by mid-April 2016, the first guests have enjoyed the new Masa Square Hotel Suites and that the response has so far been very encouraging.
“This addition to the rebranded hotel will position us to face renewed competition in the Gaborone hospitality offering,” he enthused.
He added that the next year will be an important year with regards to the regional diversification of the portfolio, noting that during the year their efforts have been directed to exploring few projects in different countries.
In November 2015, the group incorporated a company called RDC Properties South Africa, wholly owned by RDC Properties International Limited, which will act as a holding company in South Africa. In order to expand its portfolio in Namibia, RDCP signed a memorandum of understating with local partners in September 2015, dove-tailing on the strategy of regional expansion of Choppies and other supermarket chains.
Due to the complex business environment in Mozambique, the group’s strategy for this country has been to encourage the Realestate Group, the group’s controlling shareholders, to create a project and property management company in Maputo.
At last, he said, HMS1 Sarl, the property owning company holding Isalo Rock Lodge, the group’s Madagascar property, has turned around and it is starting to make a small profit.
“The political situation seems stable and the opening of two new international carriers, Turkish Airways and of AirSeychelles/Etihad, has reduced the cost of the international flights. Unfortunately, local flights are still constrained by the reliability of Air Madagascar,” Giachetti said.