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Watershed Piazza the new Letlole La Rona flagship

Publishing Date : 08 April, 2019

Author : TSAONE SEGAETSHO

An addition of Watershed Piazza to Botswana Stock Exchange (BSE)-listed property giant Letlole La Rona (LLR)’s portfolio has come with gold — it is obviously the reason for the company’s spike in revenue with its notable 99.63 percent Gross Leasable Area (GLA).


According to LLR’s unaudited financial results and distribution announcements of the half year ended 31 December 2018, the company has recorded a 32 percent rise in revenue-from P38.8 million in the previous year to P51.2 million in the current period. According to LLR such big rise in revenue should be credited to the addition of Watershed Piazza in Mahalapye to the property company portfolio. Watershed Piazza stands towering in the company’s portfolio with its fully let 40 square meter space which is believed to be collecting notable money from rental, hence the huge increase in revenue.


Watershed Piazza, boasting 99.63 percent GLA, has become LLR’s sudden poster boy and its success is pivoted by its major tenants including retail giants like Choppies, Woolworths, Pep, Dunns and Jet. Top two big players in the commercial banking sector Barclays and First National Bank also occupies a rental space at the mall.


New entrants with Watershed Piazza to LLR for half year ended 31 December 2018 includes a industrial estate with nine mini-warehouses coming with the measure between 300 square meter and 700 square meter. LLR investment portfolio grew by 26 percent by registering P1.017 million in December 2018 from P805 million in December 2017. This reflected a gross yield of 10 percent.


According to LLR, the operating profit which is surging at 32 percent and net cash flow which is pegged at 38 percent were buoyed by tighter working capital management and collections. Resultant cash and equivalent for the 2018 half year results are at P42.1 million and it is almost double the P23.1 million of the same period for 2017.


LLR investors have more reasons to smile all the way to the bank when looking at the half year results for the year ending in December 2018-the company declared a half year distribution totaling P27 million which is a mammoth increase of 52 percent from the comparative period of 2017. According to LLR this was made up of an interim distribution comprising of a dividend of 0.005 thebe per linked unit and interest of 7.14 thebe per unit and a special distribution in the form of interest of 2.53 thebe per linked unit. LLR has announced in its latest financial results that the declared distribution is payable to linked unit holders registered in the books of the company at the close of business on 15 April 2019. Therefore, the ex-dividend date is 11 April 2019.


Despite a flourishing season LLR registered a decline in its profit before tax. Its profit before tax dropped to P39.3 million in December 2018 from P54.7 million in December 2017. According to LLR this was directly as a result of impairment of the hospitality assets by P7.4 million and an once non-recurring revaluation gain of P15.5 million booked on one of the properties during the prior period. As if that was enough, the LLR poster boy Watershed Piazza made the property company to get on a backfoot when the mall’s acquisition was funded with debt. This escalated the company’s financial costs from P1.8 million in 2017 to P6.3 million in 2018.


“LLR continues to consolidate its position as a significant player in the local property market with a portfolio of just over P1 billion. The portfolio is diverse, invested across the industrial, commercial office, retail, residential and leisure sectors and remains well managed with vacancy levels at approximately 1.24 percent of GLA and minimal arrears,” said LLR CEO Chikuni Shenjere.


Shenjere said imminent sale of the hotel properties has given the company a wonderful opportunity to ensure the continued predictability of LLR’s rental streams. The company’s mission is to go regional and spread its wings to countries like Zambia and Namibia. “We concluded that the assets that were considering Zambia were not an appropriate fit for the portfolio at this time.


We definitely remain on the hunt there, keeping of cource an eye on the macroeconomic developments. We also have a great opportunity in Namibia which we are right in the middle of, and depending on how it progresses, look to be updating unit holders before the financial year end,” said Chikuni.

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