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A harmful pattern within the economy is guiding Prime Time investments offshore

By Boidus Admin

Source: vidac.co.bw

Source: vidac.co.bw

Prime Time Property Holdings’ intentions of expanding footprint in Zambia are gaining traction following recent agreed terms to acquire a substantial property in Lusaka that should swell the group’s revenue streams, a filing to the domestic bourse revealed.

The Botswana Stock Exchange listed property entity states that increased understanding of the market in Zambia and strengthening relationships with the local market stakeholders enticed its stance to proceed with greater speed than has previously been the case.
Prime Time currently owns two properties acquired from G4S Secure Solutions (Zambia) Limited in Zambia.

“Despite some current negativity surrounding the Zambian economy, with the downward trajectory of the copper price in mid to late 2015 and the subsequent depreciation of the Kwacha, our long-term view remains positive as it offers an opportunity to cultivate a US$ based income stream for the Group,” the board of directors said, adding that “further investments, both in terms of standing assets and developments, continue to be analysed”.
The group’s business activities are concentrated in the segment of property rentals and are predominantly within Botswana. Although further investments, both in terms of standing assets and developments, continued to be analysed outside boarders, Prime Time is confident in existing opportunities in Botswana particularly commercial space, the signature of the company. “This works well for a variety of occupiers as has been proved with Prime Plaza” they pronounce.

However, the locally incorporated company argued that property investment landscape has changed significantly in the last 12 months on the back of sluggish economy evidenced by weaker demand from tenants.
Despite the odds, the group closed August 2015 with vacancies pegged at 1% across the portfolio, a phenomenal achievement when one considers the current conditions in the occupier market, the board stated. “Furthermore, the well documented liquidity constraints that hit the market in late 2014, coupled with the depressed economic conditions have checked the pace of growth of our portfolio’s capital value,” noted the board.

Interestingly, despite nil acquisitions this year, at the end of August 2015, Prime Time portfolio jumped 4% to P759 million from the prior year. “This means that real growth has been achieved in a period where inflation has been running at close to 3%. The value of our portfolio is underpinned by the strength of our occupier base and the relationships we have established with our tenants,” the board explained.
Prime Plaza, property owned by Prime Time, is currently 100% occupied, after welcoming Botswana Life to the complex this year while Barclays Bank absorbed the south wing of the ground floor of their block.
The board promised investment on refurbishment and maintenance, which they say maintains healthy rates of tenant retention.

Two major refurbishments were undertaken during the 2015 fiscal year. Work at the South African High Commission in the Main Mall was completed, while the greatly expanded Woolworths at Sebele Centre was delivered to the tenant on the back of a new long-term lease.

As part of its intended strategy to grow and diversify Prime Time’s asset base, the group says it’s busy with a number of projects. The sales of Blue Jacket Square and Barclays Plaza in Francistown (worth over P70 million) acquired by Botswana Public Officers’ Pension Fund are nearing completion. “The sale price achieved represents an excellent return on our initial investment and we will redeploy the proceeds into projects that we believe offer greater growth potential in the long-term,” the board assured.

Amongst the concerted efforts is the development of the Pilane Crossing Shopping Centre, a circa P100 million project following linked unitholder approval in June 2015. The board disclosed they are already approaching 90% occupancy rate despite completion slated for mid-2016.

© 2015, Boidus. All rights reserved.

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