Prime Time vacancy rate during the half year period ended February 2021 normalized off the 5% recorded at the end of the last financial year to below 3% at this period end. The main contributors to this are the company ‘s Zambian properties where vacancies have dropped from 11.5% to 3.5% in this 6-month period.
The Botswana Stock Exchange listed Property Group says it continues to pursue its strategy of tenant retention and still provides rental relief to those affected by Government restrictions on trading.
Several leases have been re-geared throughout the portfolio to keep key tenants in Prime Time properties, with increased efforts directed towards debt collection where required. Vacancies let include those at Morula House in the Gaborone CBD and the Chirundu Centre in Zambia; both of these properties are now fully occupied.
The lettings at Pinnacle Park have exceeded management expectations in these tough trading conditions with 80% now let and another 10% under offer. Delays with tenant fit-outs have resulted in this property not contributing to these results as originally budgeted, but it is now on track to perform in the second half of this financial year.
Notable renewals during this time include AFA at AFA House in the Gaborone Fairgrounds and G4S at their Botswana Head Office. G4S Zambia have also been secured on a new 10-year lease and a cash centre at their Lusaka premises has just been completed which will contribute to revenue in the second half of the financial year.
A refurbishment of the ex-Mma Bolao shop at Sebele Centre is also complete and we eagerly await the opening of Rhapsody’s there in the very near future.
An analysis of the underlying operating profits during this interim period shows a slight decline of 3% compared to the pre-covid period of February 2020. Contractual rental income is slightly down 4% year-on-year. Management views both of these indicators as a positive result given the tough economic conditions being navigated at the moment.
Focusing on income, the first 6 months of this financial year includes a full contribution to revenue from the two new properties acquired in South Africa during the course of the comparative prior period, as well as some revenue from the new Pinnacle Park development in Setlhoa which achieved practical completion late August 2020.
Going forward the company says positive signs are beginning to show. “While we cannot pretend that trading conditions are not still challenging, we are seeing positive signs on the ground such as increased occupancy, good tenant retention and strong demand for our new developments.” The company Chairlady P Matume said.
Matume revealed that cost cutting measures are also bearing fruit and noting that the companys mix of fixed and variable interest rates has allowed the Group to benefit from cuts in interest rates over the last 12 months.
“We continue to receive support from our funders and our program of renewing/replacing maturing debt is on track. This will continue into the next financial year to achieve our ultimate goal of lengthening and spreading the tenures”
In terms of development pipeline, Matume said Prime time will deliver the new Lobatse Crossing retail centre in Q4 of 2021. “With 95% of the space already taken up this is forecast to be a great success. We still hold a landbank which will crystallise into a major extension to our Boiteko Mall in Serowe, Phase II of Prime Plaza in the Gaborone CBD and additional office space at Pinnacle Park in Setlhoa, once the funding model has been secured”
Matume said these projects are already backed by strong tenant demand and commercial fundamentals, “they are on our immediate radar to bring to fruition”