PrimeTime Property Holdings Limited, the listed variable rate loan stock company says the proposed construction of Pilane Crossing presents value proposition for unit holders as early indications show there is demand in that area. Ahead of an Extraordinary General Meeting (EGM) planned for the future, the Botswana Stock Exchange quoted outfit said in a circular that substantial market research has been undertaken on the Pilane site and tenant demand has proven to be strong.
PrimeTime said an independent international market research company has assessed the site and demographics of the catchment area.
“It noted that the Pilane/Mochudi area currently has limited retail facilities while demographic data indicates strong demand in the catchment area,” the company said in a circular to shareholders.
“These conclusions are supported by strong tenant demand for retail space at Pilane Crossing from national and regional retailers, with substantial take-up at the centre even before a full marketing campaign,” it added.
The project will be developed after PrimeTime entered into a Development Agreement with Time Projects, in terms of which Time Projects will develop a retail shopping centre on the Pilane Plot at an estimated cost of P75.2 million. The total cost of the development, including the acquisition of the land, its servicing and related professional costs bring the estimated total investment cost in the development to P96.8 million. So far, a significant portion of the funding required for the development has been secured at competitive rates. PrimeTime said it was also in discussions with financial institutions regarding securing the balance required for further financing for the scheme.
“PrimeTime has been guaranteed a net return of 9.25%, meaning the final sum payable will be determined by rentals agreed on opening and independently valued rentals should any units remain empty at the time tenants in the improvements first pay rental. The plot offers opportunity for further growth, with two further phases possible capable of adding approximately 3,000 sq m of additional lettable space.”
The development agreement is conditional on the developer securing a minimum 65 percent tenancy. The PrimeTime portfolio encompasses the retail facilities; Boiteko Junction in Serowe, Plot 29 in Ghanzi, Hillside Mall in Lobatse, Mantlo House and Nswazwi Mall in Francistown, Ramotswa Shopping Centre and, Sebele Centre and South Ring Mall in Gaborone, all of which were developed by Time Projects. The existing property portfolio of the Company was independently valued at P732 million as at 31 August 2014.