Turnstar Holdings, the Botswana Stock Exchange listed property outfit?has warned that growth in the property sector worldwide, is difficult?to achieve and said Botswana market has seen an oversupply of office?space that is affecting yields.?The group led by Gulaam Abdoola however said the year ended January?2014 has been an exciting one for the company as it has repositioned?itself in terms of management, value, earning and growth potential.?”The overall property market in Botswana is flat across all sectors,?with a cautionary indication of an oversupply of office and retail?space in Gaborone,” Turnstar said in its 2014 annual report.?”There is already evidence of declining base rentals and hardening?investment yields due to an oversupply of office space and shopping?centres around the city,” it said.?
However, the company said there is a high demand for quality office?and purpose built retail centres in Tanzania as a result of economic?fortunes where Turnstar is uniquely positioned in geographical?diversification across Botswana and Tanzania.?”Tanzania’s economy is currently the 3rd fastest growing economy in?the African continent. This growth has led to an increasing number of?the middle income group and a growing sophisticated consumer market”.?The group remains bullish there are opportunities in the continent?although they come with own risks saying real profitable growth can be?achieved in certain African countries.?”However, these opportunities come with their own unique challenges.?Although there are many opportunities in Africa, one has to be very?careful about managing the potential risks. Obtaining funding for?projects in Africa is also accompanied by its own challenges.”?The company said it is fortunate because it still has bulk land at?Mlimani City to develop. Mlimani has been a huge success and demand?for the units is high.?”The Turnstar Group is bullish regarding growth in Africa.
Management?will examine various funding instruments, in addition to bank loans to?fuel its future African growth. During the current year, the Company?intends to have discussions with financial Institutions, Consultants,?and Investment bankers to find a long term solution to fund its?African growth”.?Turnstar’s portfolio include Game City shopping Centre, Nzano Shopping?Centre, in Francistown, Fairgrounds Office Park, Mogoditshane, Supa?Save Mall, Turnstar House, Main Mall,┬á offices in Commerce Park,?Mogoditshane Flats, Hyunda Warehouse, Tapologo Estates, Mlimani city?in Tanzania.?The Turnstar flagship property in Botswana, Game City, is still the?largest and only regional shopping centre in Botswana while Mlimani?City mall is the largest purpose built indoor shopping centre in?Tanzania. Turnstar’s portfolio has limited exposure to the Botswana?office sector. The Botswana portfolio constitutes of approx. 60?percent of tenants (by GLA) comprising of large listed or large?national companies, while the Tanzania portfolio constitutes of approx? 67 percent retail exposure by revenue.?Game City will be expanded by approx. 8,000 sq.m and the works will be?completed in 18 months while The Mlimani City retail Mall will be?expanded by approx. 10,000 sq. m with basement parking.
The Mlimani?work is planned to commence in the third quarter of 2014 and take a?period of 18 months.