Turnstar Holdings Limited, the aspiring regional┬á property development┬á outfit, is┬á actively scouting for opportunities outside Botswana in a move aimed at┬á spreading its risks across the sub-continent, it said in its full year results.
The┬á year results to January 31, 2011 showed┬á solid┬á revenue growth of nine percent to P 86 million, however, it warned┬á of┬á oversupply┬á of lettable space in the┬á next┬á one and half years time sparked by the developments┬á at the CBD in Gaborone.
“As publicly announced, we are┬á currently┬á looking at possible acquisition of property outside Botswana of which, if┬á all regulatory and shareholders’ approval are received, will add great value to Turnstar Holdings Limited and diversify spread as we anticipate┬á great competition locally.
“We, in fact, anticipate┬á an oversupply of┬á lettable space in the next 18 month to┬á24 months┬á with the ongoing developments in the CBD and new shopping malls due for completion in┬á 2011/ 2012,” it said.
The company has been trading under a cautionary for sometime due to its ambitions of┬á increasing its footprint beyond the borders of Botswana.
The goliath of property development on the Botswana Stock Exchange┬á boosts of a number of┬á developments in the country that covers Game City Mall, Bifm Head Office, PG Timbers in Gaborone West, Citroen in Gaborone West, Tapologo┬á and Mogoditshane townhouses, Innisfree┬á apartments and Nzano Centre in Francistown.
The company is currently working on plans to internalize the management of its properties┬á after the┬á expiry of a contract between┬á itself and┬á Khumo PropertiesÔÇöan offshoot of Bifm and First Rand Merchant Bank.
Khumo has been managing the properties┬á on its behalf since November 2005.
Turnstar, which saw its┬á comprehensive profits plummeting 23 percent to P 103 million compared to the previous year, blames┬á performance on┬á costs associated with setting up its┬á management outfit and the┬á slow┬á economic recovery.
“Cost has gone up as Turnstar prepares to internalize management of its properties, mainly due to new office set up costs, including staff costs. For the four month period when Khumo was serving notice, Turnstar had to employ its own staff to allow for a smooth transition when Khumo contract came to an end┬á in February 2011, effectively double costing, this was a once off cost and we expect to see a reduced cost to income┬á ratio going forward, and, we expected to see a substantial reduction in operating cost,” the company said.
Further, it indicated that much of the revenue growth during the period was mainly due to contractual rental escalation coupled┬áwith new tenants at Game City phase II extension.┬á
The company has declared dividend of 0.05 thebe per share┬áand an interest of 6.15 thebe┬á per debenture shares that will be paid to link unit holders┬á at┬á June 30, 2011.