Wednesday, January 19, 2022

LLR buys into Railpark mall

Industrial property focused Letlole La Rona (LLR) is expanding its property portfolio, this time, increasing its share of retail space.


The Botswana Stock Exchange (BSE) listed company revealed on Friday that it has entered into a Sale of Share Agreement with Botswana Railways Organisation (BRO) and JTTM Properties (Proprietary) Limited (JTTM) for the acquisition of 49,775.22 shares, accounting for 32.79 percent of the shareholding in JTTM.


The Target Enterprise, JTTM Properties, is a private limited property investment vehicle which wholly owns the Railpark Mall. JTTM is currently owned by the Botswana Railway Organisation at 84.60 percent; Motor Vehicle Accident Fund at 10 percent; B.R Properties (Pty) Ltd at 3.162 percent; and Botswana Railways Staff Pension Fund at 2.21 percent.


According to the terms of the deal, LLR will pay P152.0 million for the 32.79 percent of JTTM’s net asset value as at 30 June 2021 of P463.5 million, and will be settled in cash upon fulfilment of the set conditions in the Sale of Shares Agreement.


The JTTM’s net asset value of P463.5 million is derived from the fair value of Railpark Mall, its sole investment property, valued at P690.0 million by Knight Frank Proprietary Limited, after adjusting for the company debt amounting to P167.9 million as at 30 June 2021 and net liabilities of P58.6 million which is mainly deferred tax liability arising from the cumulative revaluation gains of the property.


At a shareholding of 32.79 percent, JTTM will be an associate of LLR therefore, in line with the company’s accounting policy, JTTM will be equity accounted into LLR’s financial statements.


“The Company expects to realize an attractive distribution and net asset value returns from this transaction as it will be yield and value accretive to LLR. In addition, the acquisition of the sale shares will further diversify the Company’s portfolio through increased exposure in the prime retail sector,” LLR’s board of directors said in a statement.


“This transaction further reiterates the Company and the Board’s commitment to delivering on the growth strategy and creating value for the Company’s shareholders.”


LLR’s property portfolio is diversified through 67 percent allocation to the industrial sector, 22 percent in retail, 6 percent in office buildings and 6.2 percent residential.

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