Primetime Property Holdings (Pty) Ltd says as it was for 2020, 2021 has also been a testing year with management of the pandemic still affecting certain sectors of the economy.
“We continued to assist impacted tenants navigate their way through trade restrictions and/or the tougher economic conditions, but we believe we are starting to see the green shoots of recovery coming through.” the company says in its preliminary unaudited summarised consolidated results for the year ended 31 August 2021.
“Our overall strategy throughout the last two years – that of working together with our tenants and other stakeholders to support the survival of all – is reflected in our low vacancy levels of below 3 percent, the property improvements made during the year and the successful opening of our new Lobatse Junction retail centre post year-end which has received tremendous support from tenants and consumers.”
The company’s portfolio currently consisting of 22 properties representing 64 percent of the Group market value saw a reasonable uplift in value at year end. Pinnacle Park Phase I in Setlhoa, which was completed at the end of the prior year, has experienced strong tenant demand and the company has achieved a quality tenant base made up of parastatals, mining companies and some smaller professional tenants such as engineers and software consultants.
“There were challenges along the way such as delays in fit-outs exacerbated by labour and supply chain issues due to the lockdowns, but full occupancy was reached with the final unit let post year-end,” the company said.
Lobatse Junction, which is included in work in progress at year-end, reached practical completion soon thereafter and opened on 21st October 2021. Anchored by Spar, the centre is fully let and trading well. Across the rest of the Botswana portfolio, the end section of Sebele Centre was fitted out to a high standard with the welcome addition of Rhapsody’s Restaurant and Grip, a new sports shop, thereby rendering the centre fully let.
The long-planned South Ring Mall refurbishment, which commenced in July 2021, is on track to be completed in December 2021. This P2.5 million renovation of the exterior and walkways will refresh the look and feel of the centre and bring it more in line with PrimeTime’s recent retail developments.
The company’s properties in South Africa, acquired in the last financial year, have contributed positively during the year. While their values are yet to recover from the downturn experienced last year, management believe they have now bottomed out at 6 percent of the total Group portfolio.
“The six properties in Zambia, which make up 30 percent of the Group market value at year-end, saw a further contraction on valuation,” the report says. “The sentiment in the country post-elections held in August 2021 is positive. While we acknowledge that there is still a tough period of trading ahead, we retain sight of the longer-term potential indicated by the demographics and position of our properties.
“The remaining vacancies in our retail malls continue to fill with Chirundu now at full occupancy. We completed the addition of a cash centre to our G4S Lusaka property during the year – at a cost of USD450 000. This has been realised at over 12 percent with a 10-year USD lease.”
In terms of tenant mix, across the group 35 percent of the rental income is from major corporates, multinationals and commercial banks, 38 percent from established retail chains and a further 8 percent from the government and parastatal sector – including foreign missions. This is a well-diversified and robust mix of tenants – now totaling 340 across the Group.
Concerning future prospects and opportunities, PrimeTime says with its strategic focus still set on tenant management, property maintenance, sectoral and geographical diversification, there are further openings for the Group to enhance its core asset base at this juncture. With Lobatse Junction now complete, management’s immediate focus is to transform its current land bank into completed developments:
Bulk earthworks on the new plot in the Gaborone CBD – which is adjacent to Prime Plaza – were in progress at the year-end and plans for the first building thereon have been approved by the city council with the bonus of having been awarded the first 5-star green design rating in the country.
This development will kick off with the proceeds of the two property disposals already in an advanced stage and has an estimated cost of P65 million. The planned extension at Boiteko Junction in Serowe at an estimated cost of P60million in order to satisfy the strong tenant demand in the area and secure our footprint in the retail sector there will go on. “The success we have had in securing tenants at Pinnacle Park Phase I augurs well for future phases,” says the report.
“There is still a hectare of the site to develop which could ultimately see Pinnacle Park double in size from the 4,400 sqm already completed. We are searching for pre-commitments for the second phase, but given the attractiveness of this kind of office development in an undersupplied location and demonstrable demand, we will be looking to progress to the second phase in the near future. In Zambia, having completed the cash centre for G4S in Lusaka, there is an additional requirement under negotiation for office space, which can be developed at an estimated current cost of USD130 000 which will also be rentalised in USD on a long lease.” it said.
Primetime is invested in a diversified portfolio of office, retail and industrial properties throughout Botswana and Zambia, and more recently in South Africa. Upon listing in 2007, the portfolio – which was valued at P236 million – now comprises assets that push this value to over P1.5 billion.