Saturday, September 19, 2020

Turnstar consolidates property sector, aims to lead BSE

Turnstar Holdings Limited, the titanic property entity listed on the Botswana Stock Exchange (BSE), raised the bar for the second year running since the economic crisis began as it reported a massive full year profit of P 133 million.

However, the company that is regarded as the bell-weather of the property segmentÔÇöin the corporate sector ÔÇô warned of bumpy ride ahead as the country is gearing up for the construction of a number of malls in Gaborone that are expected to significantly affect rentals.

The move comes at a time when three other companies, including BDC property division and one of the country’s top richest men, John Mynhardt’s group of companies, Nafprop, are increasingly eyeing to list on the exchange as part of their citizen economic drive initiatives.

“The property market in Botswana has not shown any signs of being affected by the general economic crisis worldwide.
“In fact, surprisingly, property prices are the highest that they have ever been. These conditions may change in the future when we consider the amount of retail and office development planned,” Turnstar said in a statement as its flagship, Game City, and other operations posted P 154.6 million profit before tax as at the end of January 2010.

The comments come at a time when there are a series of new malls that are expected to come on board to increase the number of the already existing ones. Rail Park Shopping Complex at the Station is planned to come on board next year and will be placed next to the Central Business District (CBD).

Other malls will include Prime Time Mall near Shell Service Station in Block 10 and Bifm’s sponsored shopping complex that is also to be built in Block 10 at the Airport traffic lights.

The Bifm mall is expected to be among the country’s biggest malls as it will cover an area size of 15 hactresÔÇösame size as Grand Palm Hotel premises and its game park.
That will add on African Mall, BBS mall, Fairgrounds Mall, West Gate, Game city, Main mall, Molapo Crossing and Riverwalk.

But analysts this week did not think that the impact on the new mall will be as severe as Turnstar would like to put it, arguing that the rural-urban migration figures show that more and more people are drifting to towns and new brands of occupants ÔÇô representing the niche side of the market ÔÇô are now interested in trading in Botswana.

“Geographically, the malls are so much apart from each other and each will serve its catchment areas,” Gregory Matseka, at Capital Securities, said.

The latest report by Turnstar comes at a time when three companies are already weighing options aimed at listing on the BSE.

The companies will be led by BDC property division, which is currently under a surgical table of Imara Corporate division to ensure that profitable divisions are the ones that will be prepared for listing.

BDC property division it expected to value well over P 1 billion — including the Office Park near Fairgrounds, which is billed to cost P 800 million.

“I think if the three property companies come onto the BSE the sector will weigh more than the banking sector,” an analyst said.

Turnstar has also indicated that it is studying some options of expanding outside the country in an attempt to increase its shareholders’ value.

Turnstar started with Game City Mall on its portfolio and got a boost from some of its giant and deep pocketed shareholders, mainly Botswana Insurance Fund Management (Bifm) to extend its wings wider in the market.

That resulted in acquisition of more property, especially in Gaborone area.

The move is part of its plans to build a formidable property investment company that will ultimately be valued at P 1 billion.

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