Acquisitions, developments boost Far Properties’ asset base
Lewanika Timothy | Tuesday November 19, 2024 09:30
The diversified property developer’s assets were bolstered by developments around existing properties as well as acquisitions.
According to the company’s full-year results to June 2024, FPC's reconciliation of investment property, a figure representing additions to property investments, totalled P102 million. This includes direct acquisitions of P42.6 million and subsequent developments to properties of P59.3 million.
Writing in the FPC’s latest annual report, Vidya Sanooj, the group executive director, revealed that the company was bullish on investing in property development as compared to making acquisitions. This reflects an appetite to increase the value of existing properties as opposed to buying new properties.
“The company continued to demonstrate a preference for development over acquisitions during the year (and) six developments are currently being built in Botswana and Zambia,” she revealed.
Property developments in the pipeline include a warehouse and filling station project in Serowe under construction and at the completion stage, alongside a shopping complex and filling station project in Mathengwane and another similar development in Hukuntsi.
Directors in the annual report further revealed that they will anchor their strategy on developing business centres with multiple tenants whilst keeping a lid on increasing residential market developments.
“Our focus is on smaller business centres where there is minimal risk of a single tenant and we continue to seek to diversify. Residential remains a non-core sector and we intend to exit from the market as soon as the opportunity arises,” executives revealed.
They continued: “Our vision is to have the best-balanced portfolio in the region (excluding Zimbabwe). We believe that in Botswana we already have a land bank to deliver this, whilst in Zambia we have already embarked on a journey to establish a sufficient land bank.”
As at June, 53% of FPC’s Gross Lettable Area, a measure of the total area available for tenants, was occupied by commercial activities, with 40% for industrial and just seven percent for residential.
During the year, the group’s revenue increased by 10% to P168 million from P153 million in 2023, whilst profit before tax increased 27% to P173 million.
Operating profit increased eight percent to P151 million while vacancies across the portfolio remained below six percent, which directors hailed as strong given the tough trading environment.
FPC has a wide geopolitical spread in Botswana with 173 properties, followed by South Africa with 18 properties and Zambia with the majority of its properties located in urban and semi-urban areas. Far Properties was formed in June 2020 after the founders realised the need to establish a portfolio of companies that could answer the property requirements of the Choppies group.