- Profits from associates up from P3m in 2021 to P24m in 2020
- LLR acquired a 32.8 percent stake in Rail Park in 2020
- Has a 30 percent stake in Kenya’s Orbit Africa Logistics
The acquisition of Rail Park Mall by Letlole La Rona (LLR) has significantly boosted the company’s overall performance, this publication has established.
This acquisition has seen LLR profits from associates increasing from P3 million in full year (FY) 2021 to P24 million in the year under review.
LLR acquired a 32.8 percent stake in the Rail Park Mall adjacent to Gaborone’s bustling train station and bus terminus in 2020.
Not only did LLR acquire a stake in Rail Park Mall in the year under review but the company also acquired an initial 30 percent equity stake in Orbit Africa Logistics, a 29 243m² logistics and warehouse facility situated in a prime location in Nairobi, Kenya for US$7.2 million.
“The co-investment will grow and diversify LLR’s portfolio and balance sheet, with 6 percent of our portfolio now outside of Botswana,” says the CEO of LLR, Kamogelo Mowaneng, in the company’s integrated annual report for 2022.
“LLR has the option to increase its investment to 50 percent of Orbit Africa Logistics for a further US$7.6 million.”
Vacancy rates low
Mowaneng notes that Botswana’s industrial sector has remained resilient through the current challenging economic conditions. “Botswana government’s Economic Recovery and Transformation Plan (ERTP) and supporting policies are suited for growth in the industrial sector,” she says in the report.
According to the report, demand for warehouse space has continued to rise, which has left rental values relatively unscathed and helped keep vacancy rates low.
The CEO says Botswana’s office sector is continuing to be impacted by low demand and oversupply exacerbated by speculative development over the past few years.
“Values of prime residential properties have also been relatively flat for a few years now, which has resulted in many institutional investors exiting more significant residential complex investments,” states Mowaneng in the report.
“Go to Africa” strategy
“LLR has single-digit exposure both in terms of revenue and GLA to the residential segment. However, the steady growth in the country’s middle-class population means that sales and rental demand in this segment will likely continue for the foreseeable future.”
Looking into the future, Mowaneng says as LLR “Go to Africa” strategy matures and the company expands its portfolio to capitalise on the immense opportunities beyond the borders of Botswana, LLR will also explore the potential to diversify its income streams.
“This will augment the current inflows with US dollar-based income to bolster profitability and serve as a good risk mitigation strategy,” she notes.
LLR is a variable rate loan stock company that engages in property investment and derives revenue primarily from property rentals. It operates through the industrial, retail, residential and commercial office space property segments.