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Choppies remains towering on FAR Property far-reaching expansion

Publishing Date : 03 October, 2018

Author : TSAONE SEGAETSHO

Botswana Stock Exchange-listed FAR Property Company (FPC) property portfolio continues to go far and its three previous financial reports show a trend of giant retailer Choppies being the mainstay of its evergreen growth.

In FPC latest abridged financial results released this week; Choppies is shown as a towering figure in the company’s property portfolio dominating the FPC portfolio. In the portfolio by Gross leasable area (GLA), industrial property holds majority of 53 percent and it is dominated by Choppies. Also, Choppies takes Grade A of Segment Split by Tenant Grade while local tenants takes Grade B and new start-up companies got Grade C.


“The development and growth of our portfolio was initially fuelled by Choppies’ growing footprint as well as mounting demand for commercial and industrial properties in Botswana,” says FPC. Owners of retail giant Choppies formed FPC in 2010 and according to the property giant this was with a view of establishing a portfolio of properties that could answer the requirements of the ever growing Choppies Group. Former President Festus Mogae, wealthy billionaires Ramachandran Ottapathu and Farouk Ismail on the boards of the two companies; Choppies and FAR Property.  


In 2016 before FPC listing on BSE, stockbrokerage firm Motswedi Securities said the company was positioned to grow with the help or benefit from “Choppies rapid expansion” and the recently released financial results shows the same move. A year after Motswedi Securities horoscopic financial view, FPC and Choppies Chairman Mogae also put the retail giant forth as FPC’s anchor in the property segment.


“FPC has continued to grow its property portfolio. There has been sufficient investment into the land bank for continuing development growth into future years. This, in addition to other tenanting, will assist meeting the needs of the prime tenant, Choppies, particularly with regard to its infrastructural requirements as well as retail outlets,” said Mogae.


According to the recently released financial results, six commercial and two industrial properties are close to completion at the current date these. According to FPC, these will add to revenue growth in 2019, meaning the company’s growth is expected to continue to the next financial year.


FPC revenue increased from P121.8 million for the year to June 2017 to P134 .8 million for the year to June 2018, according to the latest financial results.  This means the revenue increased by 11 percent. FPC profit after net finance cost improved by 6 percent from June last year to June 2018.  While rent yield increased by 7 percent, property portfolio also grew by 5 percent from the last financial year.

FPC PROPERTIES

The investment property portfolio is estimated to have increased to close to P1.3 billion in the current financial year with considerations of new prospects. FPC has in the last financial year expanded out of Botswana borders to Zambia and South Africa. Top properties for FPC include the 10304m2 GLA industrial building called ERF 2282 base in the Rustenburg in South Africa. According to FPC, this is the largest development outside the boundaries of Botswana and it was custom built to cater for the needs of Choppies Warehousing Services (Proprietary) Limited. Last valued at R46 million, is dominated by occupancy of Choppies.


Another development in Rustenburg is the much anticipated ERF 2288 which whose extension must be up by now because in the last financial year as the building was said to be facing completion in this current financial year of 2017/2018. The development is also valued at R46 million.


In August 2017 FPC expanded to Lusaka, Zambia with an acquisition of a USD2,3 million shopping centre which is anchored by giant retailer Choppies. Other tenants of the Lusaka mall are Standard Chartered Bank Zambia Limited, Stanbic Bank of Zambia Limited, Finance Bank of Zambia Limited, First National Bank of Zambia Limited, AB Bank of Zambia Limited and List Café.


In an interview with BusinessPost FPC Director Ottapathu confirmed that the company has reaped better this year because of their new developments. In discussion was also the company’s mall in the country’s second city of Francistown. The 2150 square feet mall was built on the banks of Tati River in the last financial year. “It is doing well and its tenant occupancy is almost 80 percent. It has surely added value to our portfolio as we continue to expand,” said Ottapathu.

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