Botswana Stock Exchange (BSE) listed property firm, Letlole La Rona (LLR) has recorded an impressive P51.2 million in revenue for the half year ended December 31 2018, a 32 percent rise from the 38.8 million recorded in the prior year, company financials reveal.
According to the company, this is largely attributable to the addition of Watershed Piazza in Mahalapye which was acquired in May 2018 as well as the 7.5 percent annual weighted average lease escalations across the portfolio.
The home- grown loan stock company which engages in investment, rental and trade in properties also recorded a profit before tax of P39.3 million.
Watershed Piazza has one vacancy (40sqm) therefore is 99.63 percent GLA. The major tenants there include Choppies, Woolworths, Barclays, First National Bank, Jet, Pep and Dunns. Both of these retail anchors are on long term leases which have long periods to renewal.
During the comparative 12 months, the investment portfolio value grew by 26 percent to over P1 billion (31 December 2017: P805 million) with a gross yield of 10 percent. A new addition to the portfolio during the period was an upmarket industrial estate comprising of 9 mini-warehouses, each measuring between 300sqm and 700sqm, as well as the Watershed Piazza in Mahalapye.
Operating profit and net cash flow from operations, buoyed by tighter working capital management and collections, were strong advancing 32 percent and 38 percent respectively, with the resultant cash and equivalents on hand closing the period at P42.1million, nearly double the comparative’s figure of P23.1 million.
LLR CEO Chikuni Mutiswa said, “LLR continues to consolidate its position as a significant player in the local property market with a portfolio of just over P1 billion. The portfolio is diverse, invested across the industrial, commercial office, retail, residential and leisure sectors and remains well managed with vacancy levels at approximately 1.24 percent of GLA and minimal arrears.”
Beyond re-investing capital raised from the disposal of the hospitality assets, LLR will maintain the prudent-yet-aggressive growth of the portfolio, seeking out yield-enhancing opportunities both within Botswana and the wider region.
“The imminent sale of the hotel properties has given the company a wonderful opportunity to ensure the continued predictability of LLR’s rental streams. A robust, actionable pipeline shall see the company re-position itself as a significant regional player in the property market over the coming months,” said Chikuni.
The intent remains for LLR to acquire properties in the region, specifically Zambia and Namibia but as yet, no properties have been purchased.
“We concluded that the assets that we were considering in Zambia, were not appropriate fit for the portfolio at this time. We definitely remain on the hunt there, keeping of course an eye on the macroeconomics developments. We also have a great opportunity in Namibia which we are right in the middle of, and depending on how it progresses, look to be updating unit holders before the financial year end,” said Chikuni.
Letlole La Rona was founded on July 28, 2010. The company’s property portfolio includes hotel, commercial, industrial, retail and residential.