US gives RDC efficient currency hedge to the SADC region
RDC asserts that it continued to see strong performance on its investments in the United States (US).
The BSE listed outfit, RDC Properties, has reported reduced revenue from the hospitality sector of about P28.4million.
The reduction was as reflected in a prudent negative fair value adjustment of P20 million in respect of its two largest hospitality assets, Chobe Marina Lodge and the Protea Hotel by Marriott – Gaborone Masa Square.
At the peak of the COVID-19 pandemic, the Botswana property market like the rest of the world was stagnant with generally reduced levels of leasing activity and low occupancies in the hospitality sector.
Despite this, RDC says its commercial properties have performed well. “The net revenue is in line with that of the prior year, underpinned by the strong performance of the residential and industrial sectors and our blue-chip institutional tenants,” Guido Giachetti, the Executive Chair says.
In South Africa, RDC says the Capitalgro portfolio performance has exceeded the expectations as the reduced income due to protracted vacancies and cyclical rental reversions has been mitigated by the combination of a reduction in finance costs and a high (96 percent) rental collections ratio, another positive consequence of direct management strategy.
The portfolio grew to R964.5 million, up from R704million with the addition of the Capita buildings and the Rhino Africa building in March and May respectively. The portfolio distributed some R25,6 million to shareholders, representing an interest rate of 8,6 percent on shareholder loans.
Gaichetti states that management has decided to repurpose the Westlake Lifestyle Centre as a convenience center and in this regard has just concluded a 10-year lease with Checkers to house their latest specification food store and are in final negotiations with Clicks, which will secure this asset in the long term.
“The development in Woodstock, Albert Road 108, began post lockdown and is due to be complete in Q3 2021, aiming to house biotech tenants in an innovation center,” Gaichetti notes adding that the new Radisson RED Hotel, Rosebank, turn-key developed is on budget and is set to open early June 2021.
“The Rosebank node is quickly becoming the center for both business and entertainment in the City of Johannesburg and we believe that RDC is set, in time, to take full advantage of the brand and the perfect location.”
Further to that RDC asserts that it continued to see strong performance on its investments in the United States (US). After the success of the City Lights investment, the Group has reinvested the proceeds through its local partners in the Research Court commercial property in Atlanta and The Manning residential development in Nashville Tennessee. Gaichetti says the performance of these assets has been pleasing with Research Court being 100 percent let during the period and The Manning reaching 71 percent pre-sales. “The Group’s US exposure continues to provide an efficient currency hedge to the SADC region and its performance is due to a well selected Management team operating in the specific market.”
In Mozambique, the company says it is seeing strong signs of political will to improve the conditions of doing business, with US diplomats moving into their new state-of-the-art Embassy adding to business confidence. Gaichetti says the roll out of the vaccination plan should revive the letting activities which have slowed down in the Xai Xai Convenience Centre. “The petrol station works, phase 1 of the development of the larger scheme of the Zimpeto Shopping Centre in the Capital City of Maputo, is expected to reach completion in the last quarter of 2021, underpinned by the signed lease of the Anchor Tenant.”