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Tough times force PrimeTime to reduce rentals

Publishing Date : 11 February, 2020


The Botswana Stock Exchange listed company, PrimeTime Group has been forced to revise, downwards, its rentals due to the tough economic challenges prevailing in the Sub-Saharan region.  PrimeTime operates business and retail properties in Botswana, Mauritius and Zambia.

In its annual report for 2019 released this week, PrimeTime said the current property rates were a reflection of the touch economic conditions.  “In some of our other properties we have had to rebase rentals down to current market rates as a reflection of the tough economic conditions that are prevailing in Sub-Saharan Africa,” the company said.

“While reducing rentals can be unpalatable, we strive to ensure a reciprocal upside for PrimeTime when agreed to; such as a new long lease on renewal, which in turn protects and enhances our property values. The increase in operating expenses year-on-year reflects several line items.”
However, despite the reduction in rentals, the blue chip company added three properties in Botswana to its list. “Firstly the three property additions in the prior year mentioned above resulted in a full year of costs in the current year. Secondly, in line with our longer-term strategy we have invested heavily during the year in maintenance costs to secure and retain quality tenants.

“This resulted in some significant new leases and renewals secured, including Letshego Holdings at Letshego Place for three years, Barclays Bank at Hillside Mall Lobatse for five years, Ackermanns and PEP at Nswazwi Mall for five years, Exact and Options at Pilane Crossing for five years and Corpus Legal Practitioners at PwC Office Park in Lusaka for five years. Lastly on the expense side, considerable costs have been incurred on consultancy fees to streamline the group structure.

This includes rationalising the number of subsidiaries held in both Zambia and Mauritius and commencing operations in South Africa. Such an exercise comes at an initial cost but will lead to savings/increased revenues in the longer term. We are very pleased to advise that we have finally overcome the effects on the trade licencing issue that plagued us since the opening of Pilane Crossing in September 2016. Mr Price have taken occupation and are due to start trading early in 2020 and Options have taken up the remaining unit,” PrimeTime said.

It said in Botswana, the first phase of Pinnacle Park at Setlhoa would be completed next month and for the ground-work of a new central business district (CBD) plot to commence. “A refurbishment is also planned for the exterior of our South Ring Mall property and an extension to Boiteko Junction in Serewo based on strong demand for the centre.  There are also further investment prospects that are currently under consideration by the board, to which unit-holders will be alerted in due course.

“In Zambia we are working hard to fill the remaining vacancies at Chirundu and Munali as the malls bed down. To deal with the current power supply issues in the currently we are currently evaluating proposals to install solar power on all our properties there. “Our management team and associates in Zambia have identified and secured further development prospects which could provide investment opportunities for PrimeTime subject to our usual parameters of securing good tenancies,” the company announced.