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RDC rental revenue 14% down

patriot by patriot
May 20, 2021
in Business
242 10
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RDC rental revenue 14% down

RDC Group Executive Chairman Guido Giachetti

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Decline attributed to COVID-19 pandemic

Botswana property market still restrained

Two additional properties grow SA revenue

BAKANG TIRO

editors@thepatriot.co.bw

Botswana’s leading home-grown real estate Group RDC Properties Limited has seen a 14 percent decline in rental revenue which is its backbone.

The Botswana Stock Exchange (BSE) listed Group stated that its rental revenue for the financial year ended 31 December 2020 stood at P131.6 million as compared to P152.5 million posted in 2019. The diversified real estate property indicated that its two key markets of Botswana and South Africa have been heavily impacted due to deep contraction in economies owing to COVID-19.

According to the Group Executive Chairman Guido Giachetti 2020 was unprecedented year, as it has changed lives and had long term effect on the entire regional economies.

Rental revenue is down only 13.7% to P131.6m, with 55% of that receipted in Botswana and 45% in South Africa. The decrease in revenue was a combination of the impact of COVID-19 on the hospitality business where revenue decreased by P28.4m.

“In the opening remarks of my report to the shareholders exactly a year ago, I had observed that “the Coronavirus pandemic (Covid-19) had taken the world by surprise, disrupting global markets and shaking the fundamentals of our world economic models”. I am pleased to report a year on that our Senior Management, both in Botswana and South Africa, has maintained a consideredand calm attitude during this unprecedented crisis; and all our business units have maintained close contact with our tenants, our financing partners and all of our stakeholders,” he said.

Giachetti revealed that the RDC Group ended the current reporting period in a healthy position with reducing the vacancies and a number of opportunities on the horizon so as to cut the costs. He believes that they have remained true to the commitment of owning as well as managing strategic property assets that add critical value to the communities that they serve.

“The Covid-19 global hard lockdowns have highlighted the universal basic need to connect with one another as well as the importance of caring for our communities and the less fortunate – core values of RDCP.The incredible speed at which the vaccine has been developed has created optimism for a return to a more normal life. Despite the accelerated shift to a ‘work from home’ environment and the uncertainty of travel,” he added.

Chief Executive Officer (CEO) Jakopo Pari said the local market remained challenging during the Covid-19.

“However vacancies across the portfolio in the country were at 6.56% as at 31 December 2020 (opening vacancies of 10,018 sqm and expiring leases of 11,296 sqm across all sectors) and we successfully secured new leases covering 6,388 sqm in the portfolio while 10,042 sqm of al the expiring leases were renewed,” said Pari, noting that office properties outperformed others in terms of renewals.

On the Capitalgro Portfolio in the South African market, Pari said, the total value of the portfolio increased from R704.1 million to R964.5 million due to the acquisition of two extra properties.

“The addition of the two properties to the portfolio during 2020 assisted to mitigate the impact of COVID-19 due to their strong cash flows and has diversified our revenue base. The portfolio comprises of 43,410 sqm of lettable area across the seven properties in the Western Cape. The portfolio produced a return of 4.3% against an All-property Index’s average return of (35.5%) for 2020. This highlights the resilient nature of the Capitalgro portfolio and the protection offered by directly held property assets in a volatile market,” said the optimistic Pari.

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  • We must ‘walk the talk’ July 4, 2022
    We can only save ourselves and our planet by confronting climate change BY COLLEN VIXEN KELAPILE Climate change has become the enemy of human progress and a threat to humanity’s survival. We see its devastating consequences daily. No country is […]
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  • BBS launches insurance agencyJune 28, 2022
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  • MANTSWE JOINS TURNSTAR BOARDJune 28, 2022
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