RDC Properties embarks on a project aimed for SMEs

RDC Properties Limited, has announced a new project which is aimed at Small and Medium Enterprises.

This was revealed by RDC properties Chairman Guido Giachetti last week at the company’s results announcement for end December 2013 financial year.
“We will be doing a groundbreaking of the project in the coming weeks, and the projects’ duration will be 15months. Our industrial segment is still as low as 4 percent, but there is still demand for warehousing space. We are targeting small businesses that cannot afford bigger units of as much as 250 square meters; hence this 115 square meter project,” he said.

RDC Managing Director Jacopo Pari told Gazette Business that they were experiencing some challenges with SMEs that struggle with rentals. “Generally, small businesses (SMEs) sometimes struggle to pay rentals, because they lack proper business planning and they do not come to engage us on their problems. We do not like litigation and it is our last resort, therefore we try by all means not to go the legal way. However, we make a repayment plan and propose it to them.” He added that those mostly struggling to pay are in areas of Kasane, Maun, and Francistown.

The company has 385 tenants currently.
Meanwhile, RDC Properties financial year  2013 results mostly reflected the transition of trophy asset Masa Centre to a rental income generating investment property, and the corporate restructuring following the purchase of the Chobe Marina Lodge land and buying out minorities in Tholo in October last year. Masa contributed significantly with profit before fair value adjustments increasing by 83percent to P54million. The investment and property portfolio, in line with long term leases signed, grew by 12 percent to P859million which the company says represents a stable growth over the rate of inflation.

Analysing the results, Chief Investment Officer at Afena Capital Botswana, Alphonse Ndzinge said things were looking good for RDC. “The portfolio is well balanced with reasonable sector exposures and a relatively attractive lease expiry profile. Immediate expansion plans include an industrial extension and evaluating a residential development. Portfolio occupancies should improve to almost 100 percent in the coming months as vacant office space is expected to be taken up,” he said.

He further indicated that the key investment theme is the well documented expected increase in commercial space, particularly around the Gaborone CBD. He observed that most property companies are already selectively reducing exposure to non-A grade commercial holdings, and exploring opportunities in other areas around the country. “With domestic borrowing costs relatively low, we should see the under-geared companies accelerating their domestic expansion pipelines in to the industrial and residential segments and to a lesser extent retail. The shift into the rest of Africa is also a big focus. Several companies are exploring assets around the continent. There is always also the possibility of consolidation as some of the listed portfolios have rather complimentary exposures,” Ndzinge added.