FPC (Far Property Company) has had a successful year marked by strong performances and significant achievements. The company grew its portfolio from P1, 29 billion to P1,36 billion, an appreciation of the asset value over P65 million. According to Chairman of the board of directors, Former President Festus Mogae, this was achieved through increases in valuation of the properties and acquisition of new properties. He said properties management continued to be robust. The chairman said focus on rental collection is unwavering and as a result rents were collected in full, while lease agreements continue to be well managed, with annual escalations incorporated. Expired leases were either renewed or leased to new tenants preserving our low vacancy rates.
P134,8 million revenue for the year ended 30 June 2018, increased by 10,69 percent compared to P121,8 million for the previous year. Operating profit was up 3, 18 percent to P120, 2 million from P116,5 million in during the 2017 full year. Further, profit before income tax was P36,2 million compared to P62,2 million in the previous year. FPC generated profit attributable to linked unitholders of P39,2 million compared to P65,3 million in FY2017. Earnings per linked unit were P0.10 compared to P0.17 the year before. Net cash generated from operating activities increased to P86,4 million, against P83,7 million a year ago.
The majority of FPC’s assets are located in its home market of Botswana, mostly in urban or peri-urban areas. “Our portfolio continued to prove resilient in the subdued economy. Although the economy took a knock as the commodity market declined, conditions are improving again as the price of and demand for diamonds increases, buoyed by renewed global growth,” said Ramachandran Ottapathu, founding director of FAR.
Botswana’s property market is mature and delivers steady long-term returns, benefiting from the country’s stable economy. Demand for retail space is waning, as a result of weaker consumer spending. Demand for larger industrial space is predominantly from retailers requiring prominent properties, which fits with FPC’s offering. As a local company, with a countrywide footprint FPC benefits from extensive knowledge of the local market, established networks with tenants and on the ground knowledge of opportunities as they arise, according to Ram.
However, to achieve significant growth and diversification, Ram said FAR needs to look further afield in the region. Despite the deceleration in growth rates because of the decline in the commodity market, rapid population growth and urbanisation continue to drive property market activity in the region. The population is growing at a faster rate than that of any other global region and its demographic profile is both young and increasingly urbanised. FPC’s South African assets are industrial and commercial properties in the North West. The portfolio remained resilient despite the volatility in the South African economy during the year.
“In line with our strategy to grow our asset base, we concluded a number of acquisitions during the year. Some of these are in the process of conclusion. We also undertake new developments to capitalise on new opportunities in the market.”
FAR expanded its presence to Zambia with the US$3,6 million acquisition of a mall in Lusaka. The property is fully occupied. Notable tenants include Standard Chartered Bank, Stanbic Bank of Zambia Limited, Finance Bank of Zambia, First National Bank of Zambia Limited, AB Bank of Zambia Limited and List Café and Choppies. In Botswana, FAR acquired properties to the value of P45,97 million. The largest of these is 9 Industrial Land in GICP for P34,4 million. The property, which is under development and spans a 10 000m2 warehouse, was transferred in August 2017.
“We will continue to grow and diversify our asset base through acquisitions and developments in Botswana, South Africa and Zambia in the year ahead,” said Ram.