New African Properties Limited, the listed property outfit, said it will continue to look for new ‘suitable’ investment opportunities to enhance long term sustainable growth.
In a statement accompanying the results for the full year ended 31 July 2013, the company said however its intention is not to grow purely for the sake of growth.
“NAP is well placed to take advantage of opportunities that do arise. This is particularly challenging in the current Botswana market where the demand for investment property offering acceptable returns exceeds supply,” said the company headed by John Mynhardt.
“This has been exacerbated by the fact that new development opportunities are limited in view of the economic slowdown and significant recent development in the retail and office segments, particularly in Gaborone,” it added.
New African Properties added that future developments and acquisitions will be funded through a combination of cash, debt and equity, as appropriate at the time.
“From a long term perspective the Board considers it appropriate to increase the debt level in the portfolio to provide the positive effects of gearing over time. The current challenge to this is the limited availability of property and, as a result, the likely yields relative to the cost of debt in the short term.”
The full year results showed that NAP revenues rose to P127 million which was better than P115 million registered on the corresponding period while net income from operations (before rent straight line adjustment) amounts to P104,5 million, a 10 percent increase on last year’s P95,3 million.
Net distributable income of P101, 6 million has increased by 14 percent from last year’s P89.2 million as a result of this and the reduction in taxes related to these earnings.
NAP said profit for the year stands at 29 percent above last year as a result of the increase in distributable profits as well as higher increases in the fair value adjustments of assets. Fair value and other accounting adjustments, net of related taxes, are treated as non-distributable and do not result in cash flows.
The group’s investment properties as valued by Curtis Matobolo of Knight Frank stands at P1 061 million at a weighted average capitalisation rate of 11,19 percent with vacancies amounted to 3,6 percent by gross lettable area and 2,8 percent by rental value at year end.
New African Properties portfolio is made up of Cash Bazaar Holdings assets, which are sprawled between Botswana and Namibia.
The assets include Riverwalk Mall, Riverwalk Plaza, Kagiso Mall, Kasane Mall, and Mafenyatala Mall in Molepolole among the 65 properties own by the company. Some of the property largely made up by shopping centers is based outside Botswana.
They have 440 leases over the 65 properties in question and the bulk of them is made up of some of the Cash Bazaar Holdings subsidiaries, such as CB Stores, Topline, Sole Shoes, Taku Taku, Furnmart and Home Corp.