The company delivers solid performance amidst the pandemic
BSE listed property group, PrimeTime Properties, reported a solid operating performance for the six months ended 28 February 2021, despite strong economic headwinds in countries of operation due to the coronavirus pandemic.
During the period, the company registered a rental income of P77.2 million, a slight decrease from P78.9 million recorded in the previous corresponding period.
“Our hands-on approach to asset and property management saw us reduce vacancies across the portfolio from 5 percent in the prior fiscal year to 3 percent, despite harsh economic circumstances. We cut operating costs by 10 percent year-on-year and further renewed several key leases. Our tenant retention initiatives are bearing fruit with several leases being re-geared to keep key tenants in our properties,” said Sandy Kelly, Managing Director.
The main contributors to the reduction in vacancies were the Company’s Zambian properties where vacancies dropped significantly from 11.5 percent to 3.5 percent for the period under review.
Significant vacancies left include space at Morula House in the Gaborone CBD and Chirundu Centre in Zambia, which are both fully occupied.
“Letting at Pinnacle Park has been most encouraging despite the tough trading conditions, and the asset is now 80 percent let with a further 10 percent of the gross lettable area under negotiation,” Kelly remarked.
As a result of a delay in tenant fit-outs due to Covid-19, the property did not contribute to the results under review as the Company anticipated but is now on track to perform in the second half of the financial year.
Kelly explained that although a large accounting loss has been recorded in the current period as a result of the strengthening of the Pula against the US dollar, this remains unrealised.
“With our inter-company loan from Botswana recorded in US dollar, movements in the exchange rate can cause large unrealised profits or losses,” he explained.
“A much more accurate reflection of our performance lies in the analysis of our underlying profits for the reporting period, which was down slightly by 3 percent compared to the pre-Covid period of February 2020. Contractual rental income commensurately decreased marginally by 4 percent year-on-year, despite the Covid-19 pandemic, bearing testimony to the Company’s solid performance under the circumstance,” Kelly said.
PrimeTime, Kelly said, is well placed to grow off its strategically positioned land bank as the economy recovers post-Covid-19.
The Company expects to deliver its new retail centre, Lobatse Junction in the fourth quarter of 2021. The shopping centre is 95 percent let and is expected to be a dominant player.
Other pipeline developments backed by strong tenant demand include an extension to the Boiteko Mall in Serowe, Phase II of Prime Plaza in the Gaborone CBD and additional office space at Pinnacle Park in Setlhoa, once the funding model has been secured.
“Going forward, our strategic focus will remain on tenant management, property maintenance, sectorial and geographical diversification as we believe these will have the combined effect of maintaining the value of the Company’s assets in the longer term,” Kelly concluded.