Debswana Pension Fund, the country’s largest private pension fund, has substantially increased its stake in New African Properties as Cash Bazaar Holdings, the major shareholder, continues to reduce its interest in the property listed company.
Last week on Wednesday 30th, DPF raised its shareholding in NAP from 3.28 percent to 17.75 percent after acquiring about 87 million linked units in the property company that listed on the Botswana Stock Exchange in 2011. The units were released by Cash Bazaar Holdings, which has now reduced its stake in NAP from 30.4 percent to 15.5 percent.
The value of the transaction was P280.7 million after the shares were sold at P3.21 per share, making it the largest single day trade for this year. NAP is not new to breaking records on the BSE. In 2016, BSE achieved a total turnover of P494.3 million in a single day’s trading, making history since the inception of the BSE. The record breaking trade was courtesy of NAP, which accounted for 93 percent of all shares traded on that day. NAP traded 26 percent of its total issued shares, delivering a P457.3 million turnover on its own after Cash Bazaar reduced its shareholding from 79.3 percent to 53.9 percent.
NAP followed again in 2017 when Cash Bazaar offloaded 142 million shares worth P456 million, further reducing its stake in the property company to 30.4 percent. In the last two years, Cash Bazaar, owned by the Mynhardt family, raised about a billion pula, leaving them with little control over NAP.
With Cash Bazaar’s stake halved, Botswana Public Pension Fund has now become the single largest shareholder in NAP at 27.1 percent, with DPF coming second. NAP has 604 million linked units listed on the BSE with more than 84 percent held by the public, of which pension funds and insurance companies account for about 77 percent of the total issued shares.
Meanwhile, the latest move by DPF to substantially increase its shareholding in NAP is expected to bolster its returns after the fund’s local investments did not fare well in the previous year. DPF recorded growth of 7.7 percent gross and 7 percent net return on total fund, with much of the returns coming from offshore investments. The P7 billion fund in 2017 allocated 59 percent of funds to offshore investments while the rest was invested in the domestic market.
The fund’s worst performing asset class was local equities, which have been under pressure in the last two years. In the 12 months ending December 2017, local equities’ performance was down by 5.8 percent, on the back of another 11.3 percent drop in 2016.
NAP has been a firm favourite amongst investors as the property listed company continues to deliver solid returns every year. In 2017, the total return to investors for the year was 17.6 percent, comprising an income return of 7.7 percent and capital gains of 9.9 percent. Since listing in September 2011, the total return to investors amount to 117 percent, with a total income return of 56 percent and capital return of 61 percent on the initial listing of P2 per linked unit. All things considered, this equates to a compound annual total return of 13.8 percent.
It is these returns and the nature of NAP business that makes the company an attractive alternative to fixed income investments, particularly suited to long term investors and pension funds. Property stocks are highly regarded by institutional investors such as pension funds and insurance companies as the stocks are largely seen as defensive yet delivering solid returns over a long period.
NAP has a vast lucrative property portfolio such as Riverwalk Mall, Riverwalk Plaza and Kagiso Centre, Gaborone Shopping Centre, Mafenyatlala Mall in Molepolole, Kasane Mall in Kasane and Mokoro Centre in Maun. The portfolio comprises primarily of prime retail sites with a strong tenant base, including Pick ‘n Pay, Spar, Choppies, Mr Price, Woolworths, Pep, Cashbuild, Furnmat, CB Stores, Ackermans, Cape Union Mart, Exclusive Books, FNB, Hi-Fi Corporation, Home Corp, Incredible Connection, Jet, KFC, Nando’s, New Capitol Cinema, Mugg & Bean, JB Sports, Truworths and many others.