- Tenant concessions removed post-COVID a factor in normalising
- Value of Botswana portfolio up 9% at year-end
- Ghanzi and Ramotswa retail properties sold for P45m
- Funds redeployed to development of Prime Plaza II Motswere Building
Despite 2022 being a challenging year due to rising interest rates and inflation, volatile exchange rates, political instability, and increased energy and food prices caused by the war in Ukraine, PrimeTime Properties says it has experienced a return to normality since COVID-19 restrictions were lifted.
According to the property company, a notable factor in returning to normality was removing all tenant rental concessions, which, along with lease regears, helped PrimeTime retain its tenants and achieve excellent occupancy levels in the tough trading conditions. “Driving income growth and managing costs in such a difficult operating environment is tough,” the company says in its consolidated results for the year ended August 31, 2022.
“The property sector is still in recovery from the pandemic’s aftershocks, which constrained economic growth, dampening consumer and business confidence. “It will take some time for the sector to fully recover. Our property portfolio has, however, proven its resilience and defensiveness despite these current headwinds.”
Botswana property portfolio
The Group’s portfolio in Botswana, which consists of 21 properties representing 64 percent of Group market value, saw a reasonable uplift in value of 9 percent at the year-end, rental income was up 11 percent on the prior year and vacancies were just 2 percent by the end of the year.
Its development in Lobatse, Lobatse Junction Shopping Centre, was 100 percent let when it opened in October 2021. “Valued at P114 million, it comprises 9 000 meter squares and 39 tenants with Spar as its anchor tenant plus a good spread of national retailers,” says the PrimeTime report.
Pinnacle Park Phase I, the office park owned by the Group at Plot 75782 Setlhoa, Gaborone was completed at the end of the 2020 financial year. According to PrimeTime, as at the current year-end, the total estimated costs to complete the development (remaining tenant fit-outs) was Pnil (2021: P1 205 168). The Group also acquired Plot 54359 in the Gaborone CBD in 2019 where bulk earthworks had commenced in the prior year while development of the first building (of four) and basement began in the current year.
“At the year-end the total estimated committed costs for these works was P44 298 221 (2021: P3 814 658),” says the report. “The refurbishment of South Ring Mall, a retail shopping center at Plot 50423 Gaborone, was completed during the year. At the year-end the estimated cost to complete this work was Pnil (2021: P1 653 512).” It notes that in the period under review, PrimeTime disposed of its Ghanzi and Ramotswa retail properties for a combined consideration of P45 million. The funds raised were redeployed to the Prime Plaza II Motswere Building development.
The development is progressing well with the first building expected to be completed in August 2023 and negotiations in an advanced stage with potential occupiers for the building, which offers a new level of tenant experience in the Botswana market. PrimeTime is a variable loan stock company listed on the Botswana Stock Exchange. It is a preferred property investment vehicle for institutions and private investors alike and invests in a in a diversified portfolio of office, retail and industrial properties throughout Botswana and Zambia, and more recently in South Africa.
