Increased Stake in JTTM Contributed P63 Million Towards The Revenue Pool
Letlole La Rona (LLR) has seen significant growth in its financial performance following its decision to acquire a majority stake in Rail Park Mall.
LLR initially held a 32.79 percent stake in JTTM Properties, the owners of Rail Park Mall, but increased its stake to 57.79 percent in October 2023, making JTTM a subsidiary of LLR.
This strategic move, worth P140 million, was financed by the profits from the sale of Moedi House and Red Square Apartments, which also helped reduce debt within LLR’s portfolio.
As a result of the acquisition, LLR’s revenue saw a substantial 69 percent increase, rising from P102 million to P173.2 million, which contributed to a profit before tax of P41.1 million and comprehensive profits of P26.2 million.
Despite tough market conditions marked by rental reversions and stable rental prices, LLR was able to maintain average lease escalation rates between 6-8 percent , in line with market demands.
This led to an impressive occupancy rate of 99 percent, underscoring the strength of LLR’s assets and its strong tenant relations.
“This is a testament to the quality of our investment properties and the strong relationships we have built with our tenants,” said LLR Chief Executive Officer, Kamogelo Mowaneng.
She also noted that the company had improved lease tenures, raising its weighted average lease expiry period from 3.5 years to 3.6 years, primarily due to a newly signed ten-year lease with a multinational company.
LLR reported 100 percent collection rates for the year, with arrears well-contained, and its investment portfolio grew from P1.5 billion in 2023 to P1.9 billion in 2024.
The portfolio is diversified, with 55 percent in retail, 44 percent in industrial, and 1percent in residential properties.
“The consolidation of JTTM led to strong growth in LLR’s investment portfolio,” Mowaneng said, adding that JTTM contributed P63 million to the total revenue growth of P71 million, while direct property investments contributed P8 million to the revenue growth.
However, despite this robust revenue growth, LLR’s profits before tax dropped by 66 percent, from P119.3 million in 2023 to P41.1 million in 2024.
This decline was largely due to challenges in LLR’s investment in Kenya.
As part of its “Go to Africa” strategy launched in 2022, LLR had invested P100 million in a single-tenant warehouse in Kenya, aimed at diversifying its portfolio with high-returning assets across Africa.
However, financial difficulties experienced by the tenant in 2024 resulted in an impairment loss of P100 million, reducing the asset’s value from P109 million to P3.7 million.
“Going forward, we plan to focus on diversification, portfolio growth, and value preservation,” Mowaneng said. She also revealed plans for capital raising to strengthen the company’s ability to adapt to changing market conditions.
