The relocation of the Diamond Trading Company (DTC) from London to Gaborone has resulted in the swelling of speculative developments over the years in the new CBD and other premier business parks, according to a research note by Stockbrokers Botswana
The brokerage firm said the more commercial properties are expected to grace the office market with the expected completion of Fairscape’s offices, and at least four new commercial properties in the CBD in the next 2-3 years.
Stockbrockers Botswana predict that the office market sector will remain in oversupply for the next 2-3 years with rental growth curtailed to meet this oversupply adding that there is increased competition for retail property market.
Recent entrants to the market, Sebele mall, Rail Park mall and Airport Junction were all opened within the space of three years and only serve to increase the strain on retailers and other shopping centers as competition intensifies.
The new entrants appear poised to take away market share from the mature retail portfolios with high exposure in these areas, portfolios such as Turnstar and NAP.
As more customers become attracted to the new entrants, pressure is placed on anchor tenants in the established malls, as they would have to take up space in the new malls to protect their market.
“In the Industrial sector, strong demand will continue to persist due to the lack of ideal industrial properties in the market,” reads the report.
With the relocation of over 80 families from DTC London to Botswana, the demand for up-market accommodation will remain for the foreseeable future. Market values for the residential market are expected to rise, along with the demand.
The Botswana Housing Corporation (BHC) whose mandate is to provide housing to government, local authorities as well as low-income households, appears to be struggling to keep up with the demand for low-cost housing in Botswana.
“Until BHC can develop enough accommodation to satisfy the lower end of the market, this sector will continue to register the largest rental gains in the mark the note said in part.
Stockbrokers Botswana noted that there is reason to believe the hotel and tourism industry is trying to catch up with the expected increase in demand, which is attributable to the DTC relocation.
The report states that extended future opportunities for the industry to flourish are met by improvements in transport and access into the country as Air Botswana has increased direct flights into and out to other foreign countries.
“DTC is said to have 75 sight holders worldwide, of which the relocation would have these sight holders visiting Botswana at least 10 times a year, seeking five-star hospitality and up-to-standard tourism and leisure activities,” stated the report.
Therefore property portfolios such as Letlole La Rona and RDC, which are highly exposed to this sector relative to their listed peers, are expected to make use of the glassy possibilities.