LLR seeks partners for African campaign
Lewanika Timothy | Monday October 2, 2023 06:00
The listed group’s ‘Go to Africa’ strategy suffered a knock early this year when a shareholder tussle resulted in the exit of Grit Real Estate, the pan-African group that was leading LLR’s push into the continent.
From being the second largest equity holder with a 30% stake, Grit gradually shed its holdings in LLR to zero, citing a change in its strategy.
Prior to its exit, Grit helped LLR finalise a $15 million equity deal in Kenya, the local property group’s first expansion into the continent.
On Monday, LLR CEO, Kamogelo Mowaneng said the local group is seeking partners with “skin in the game” in African markets who can help to unlock investments in the continent.
“We are seeking to expand our portfolio to include more African markets, and despite Grit dropping out we will bridge this gap by working with partners who are already where we want to go, to make our entrance into African markets more seamless,” she told BusinessWeek at the group’s full-year results briefing.
The need to keep chasing assets in Africa comes as opportunities thin out in the local market, LLR executives said.
The group has said price increases in the cost of land and rentals in the local property market may be beyond justifiable value which could threaten the price stability of the market.
“We have seen a lot of asset managers moving into the property space and pension funds like the Botswana Public Officers Pension Fund preparing to invest vigorously in the property market mainly because of changes in the pension rules.
“(As a result) prices in the market have been unsteady, mostly increasing to try and accommodate these coming funds,” Mowaneng said.
Local pension funds are scrambling to assess local investment opportunities as changes to the Retirement Fund Act will require them to invest a minimum of 50% of their assets domestically by 2027.
The changes will require the gradual return of more than P16 billion in offshore funds. Meanwhile, LLR is consolidating its current domestic assets, with negotiations advancing with Botswana Railways organisation to acquire an additional 25% stake in Rail Park Mall for a consideration of P140 million.
The acquisition will increase LLR’s stake in the asset vehicle that owns the Mall from 32.79% to 57.79%, making it a subsidiary of LLR. Speaking at the results briefing, LLR executives also revealed that the group has earmarked non-core assets to the value of P96.5 million for disposal.
“Proceeds from the sales will be used to reduce debt levels and to fund new high-yielding opportunities,” the officials stated.