Variable rate loan stock company, New African Properties (NAP), has reported that the performance of its properties in Selebi Phikwe has exceeded expectations.
NAP, which includes Riverwalk mall in Gaborone amongst its flagship projects, stated in its financial statements for the year ended 31 July, 2019 that its Phikwe-based properties performed marginally better than expected.
The statement revealed that vacancies in the town decreased from 2, 094 square metres to 1, 785 square metres during the year, albeit at reduced rentals.
Properties in Phikwe reportedly account for 41 percent of NAP’s total portfolio.
The closure of the BCL mine in 2016, which served as the backbone of the Phikwe region, hit NAP and the town hard.
Many companies were forced to shut-up shop while others relocated to greener pastures.
This proved to be the case over the next three years, with NAP’s lease expiry profile in Phikwe at 26 percent, 49 percent and 23 percent respectively.
However, for the most recent financial year, ended in July, the figure stood at just 2 percent.
Of the leases which expired during the period under review, it is reported they were either renegotiated or re-let.
Meanwhile, NAP, which publicly listed on the Botswana Stock Exchange Limited (BSEL) in September 2011, says its performance since listing has provided a consistent growth in distribution to shareholders and the group’s net asset value, with compound annual growth rates of 8.4 percent and 6.5 percent respectively.
The property company says this is underpinned by a strong diversified tenant base occupying retail properties throughout the country.
Unitholders- known as people who held their units for the whole year – are reported to have enjoyed a total return of 9 percent while those who have invested since the company listed earned a compounded annual return of 11.8 percent.
The current year’s return the group says is almost exclusively made up from the distributions paid as the unit price only increased by 3 thebe from P3.21 to P3.24.
For the year under review, NAP recorded a profit after tax of P198.7 million, a noticeable decline from P217.3 million achieved in the same period last year.
Although the vacancies at Riverwalk mall, together with any potential adverse changes in Phikwe, are expected to impact the performance of the company in the year ahead, NAP management is hopeful of achieving real distribution growth to unit holders.