Declines by P20.9 million
Diversified property outfit, RDC Properties, rental revenue went by P20.9 million from P152.5 million in 2019 to P131.6 million in the year ended 31 December 2020, this publication has established.
According to RDC Executive Chairman, Guido Giachetti, 55 percent of the P131.6 million figure was receipted in Botswana and 45 percent in South Africa. He said the decrease in revenue was a combination of the impact of COVID on the hospitality business where revenue decreased by P28.4 million and the rental deferment/rebate packages agreed with commercial/retail tenants.
“This was partially offset by lower lending rates and the new acquisition’s strong cash flows,(notably in Capitalgro) which resulted in a P6.8 million increase,” he said. “Finance costs are on aggregate higher by P9.6m due to the costs to fund the Radisson RED project.”
For his part, the CEO of RDC Jacopo Pari stated that the Botswana market remained challenging during COVID-19. “However, vacancies across the portfolio in the country were at 6.56 percent as at 31 December 2020 (opening vacancies of 10,018 sqm and expiring leases of 11,296 sqm across all sectors) and we successfully secured new leases covering 6,388 sqm in the portfolio while 10,042 sqm of expiring leases were renewed,” he said.
RDC owns 22 properties in Botswana with 174 active tenants in office properties which Pari said outperformed all other properties in terms of renewals by accounting for 6,469 sqm of renewed leases while office (2,156 sqm) and industrial (2,517 sqm) properties jointly took the lead in consideration of new leases secured for the period. “These results were quite a remarkable success in the face of the pandemic and is clear demonstration of our balanced portfolio exhibiting some resilience during a challenging period,” he said.
“While the industrial and residential demand remained strong throughout the year, the retail sector was under pressure. To support businesses to get through the pandemic period, some relief was granted by way of rental deferrals and the conversion of consolidated rentals into short term debt arrangements on a case by case basis.”
Some of the properties of RDC Properties in Botswana include Chobe Marina Lodge and Masa Centre, which Pari said represent 41 percent of the Group’s portfolio and have underpinned the growth of the Group since their acquisition.
Meanwhile, Pari stated that in the year under review, profit from RDC operations stood at P82.7 million (2019: P106.7 million) representing a 22.5 percent decline due to the operating costs of the properties being incompressible against reduced revenue due to COVID-19. He said the investment and property portfolio increased by 13.6 percent to P2.3 billion (2019: P2.02 billion). “The largest contributor to the growth of the portfolio value relates to the capital appreciation of 49% of the portfolio which was independently valued,” he said.
RDC Properties Limited is a variable rate loan stock company which develops and invests in modern commercial, industrial and residential buildings in various locations in Botswana, South Africa and Madagascar, among other countries. The company operates through the property rentals segment.