Prime Time confident on retail space

Andrew Maramwidze - BG reporter
Tuesday, 12 February 2019
Prime Time confident on retail space

Botswana Stock Exchange (BSE) listed property company, PrimeTime is optimistic that its retail portifolio will record positive growth, as impasse on licensing of foreign retailers has been resolved.

The company’s 2018 annual report released this week indicate that the occupational retail market is now settling down following a period of uncertainty as foreign retailers’ expansion was impaired by licensing difficulties. “That issue now appears to have been resolved, which has given the sector a renewed confidence,” said Sandy Kelly, Managing Director for Prime Time.

Over the past three years, investment and trade authorities have been at loggerheads with business community over the licensing of foreign retailers. In 2016, 30 percent of South African retailer tenants on Prime Time’s Pilane Mall were denied trading licences by the government, a development that dented the company’s revenues. Apart from retail space, Kelly said office market is developing rapidly on the local market, with new developments in the CBD continuing to rise from the ground and a real critical mass of businesses now located there, pulling more occupiers to the area. 

Kelly notes that the property market has seen a rapid expansion over the past years with substantial new space delivered in the office and retail sectors. “Investor appetite for high-quality assets is strong, supporting capital values through competition between buyers for standing institutional grade property. Although competition has compressed yields, there will be investment opportunities in various markets across the country as Botswana grows,” said Kelly. Some of the properties under Prime Time’s portifolio on the local market are Mantlo House already sold above book value, AFA HOUSE undergoing renovations with a new lease signed, The Design Quarter and Ramotswa Shopping Centre. Kelly said several of the company’s properties on the local market are subject to ground leases and as their terms shorten the market value is adjusted accordingly.

“We are at the advanced stages of negotiating a substantial extension on one of these and on purchasing the freehold on another, both of which should be completed in the 2019 financial year.”In Zambia, despite the ups and downs of the copper price and Kwacha in recent years, Prime Time’s footprint is growing due to urbanising population and a general lack of good quality stock.

Kelly said urbanisation and limited stock present a compelling case for the long-term prospects of the property market.“There has also been considerable retail development, which is taking a while to absorb in some areas, especially parts of Lusaka. “However, the overall provision of formal retail space in comparison to other countries in the region is low and will provide opportunities for investment for years to come,” Kelly said.

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