Letlole La Rona, the Botswana Stock Exchange (BSE) listed property investment outfit, said the execution of its portfolio strategy developed in 2012 has been successful.
The strategy focuses on maximising of existing vacant spaces and restructuring the portfolio.
According to its financial results for the year ended 30 June 2013, the company undertook a warehouse extension intended to increase first year net income by P6.1m and increase the yield of the portfolio by 11.58 percent. The extension is in progress and the anticipated date of completion is January 2014.
Stanlib Botswana Real Estate Asset Manager, Sethebe Manake, said Letlole La Rona continues to operate at minimal vacancy levels.
She pointed out that the Independent Property Databank (IPD) which provides property performance indices in many countries worldwide rated Letlole La Rona as one of the best performers in Botswana as it performed at 5.3 percent above benchmark for the period ended December 2012.
“We are challenged by maximum exposure risk, development risk, underdeveloped markets and home ground advantage,” said Manake, in announcing the company’s results on Thursday.
The company’s profit after fair value adjustment and before tax for the full year ended 30 June 2013 amounted to P89.9 million. Manake pointed out that an independent valuation of the property portfolio has been carried out which resulted in a revaluation to P498.1 million as at 30 June 2013 and reflects an increase of P46.6million, a 10 percent increase from 30 June 2012.
“Opportunities for us include extensive due diligence and research, high return investments, opportunity to be creative, cost of finance as well as localised partnerships,” she said.
Highlighting the current development, Manake said there has been the extension of Plot 32084 by 11 200sqm and added that the project’s groundbreaking was in June 2013. She said the project is expected to be concluded by January 2014 with the capital cost of approximately P41 million.
“Currently our portfolio is 100 percent let and the average lease period is 3-5 years for industrial and retail. The hotels have 7 year leases remaining,” said Manake.
She also revealed that commercial space has two years left on the lease and added that rental rates achieved at market related rentals on renewals.
She also pointed out that strong growth in earnings per linked units at 13.6 percent growth from 2012. She added that profit after tax grew by 17 percent while the execution of strategy on track.