Turnstar, the property company, defied the difficult trading conditions brought about by the global economic crisis by brightening the faces of shareholders with some impressive results.
The company’s annual revenue to the end of January bulged from P 67.8 million to P 96.7 million, thanks to the buoyant demand for retail space. The company’s net profit also surged from P 50 million to P 62.8 million as it experienced some reduction in arrears because of the increase in retail activity.
“During the first 12 months of the financial year, Turnstar showed a reduction in arrears and an increase in retail activity. Some of the multi ÔÇônationals occupying space in our retail centers experienced better than expected turnover figures for this period, which has resulted in an increase in demand for space at these centers,” the company said in its financial report.
The company, which has just shifted its reporting period from October to January, acquired another shopping complex for P 12.8 million that was wholly funded from its war chest.
The company started with Game City Mall on its portfolio. It 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 the 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.
“Turnstar results show an increase in revenue of three percent and an increase in distribution of six percent year on year,” Turnstar said.
However, Turnstar warned that the ongoing global credit crisis is going to impact negatively on Botswana, adding that it would cautiously implement its expansion plan and take a review on some of the investments it has undertaken.
“We believe that due to the job losses in the mining sector in areas like Francistown, Jwaneng and Phikwe we will be greatly affected and in the short term, we should, only in extraordinary circumstances, increase our exposure in these areas. The sector that gets affected first is in retail. This is due to spending power of the masses being reduced following job losses. People concentrate less on buying luxury goods and more on necessities,” Turnstar said.
The move is likely to result in more vacancies as the retail sector closes down. But the company said it is still upbeat about its investments at Game City Mall in Gaborone.
“We do believe that the demand for retail space in Gaborone has not yet being satisfied. We should tap into the captive market that we have created at Game City shopping centre. We have plans to expand and this is mainly driven by demand,” the company said.