Far Property set to expand footprint to Zambia
Isaac Pinielo | Thursday March 23, 2017 18:00
The company, which is owned by Choppies Group directors Ramachandran Ottapathu and Farouk Ismail, maintained a strong asset growth, recording P1.38 billion of assets while reducing the loan to asset ratio to 33% in the six months ended December 2016.
In a statement accompanying their results for the six months period, Ottapathu said they are looking to acquire more properties locally and internationally, noting that acquisition of new investment properties in South Africa and Zambia are under negotiation.
He also indicated that occupancy in some of the properties in Francistown was affected by the delays in the completion of the spaghetti intersection.
Ottapathu further expressed concern stating that their new retail property space in Francistown will be adversely affected by the government’s reservation of some business categories for Batswana.
“We need clear and open policy on this matter that will encourage both foreign and local businesses to operate,” he said.
Net income from operations improved by six percent to P36.4 million with rental yield recording a six percent improvement. Rental income also increased from P48.4 million in December 2015 to P53.4 million for the full year 2017.
Far Property also showed a well-balanced portfolio by Gross Leasable Area (GLA), with the industrial portfolio accounting for 48%, commercial at 36% and residential 16%.
According to the directors, the company, whose properties have a wide geopolitical spread in Botswana and South Africa, is backed by long-term leases. The majority of its properties are located in urban and semi urban areas.
Far Property was formed in June 2010 after the founders realised the need to establish a portfolio of companies that could answer the property requirements of the Choppies Group.
Its property portfolio in Botswana is valued at P1.06 billion, while South African properties are valued at R239.2 million, according to leading brokerage firm, Motswedi Securities.
Historically, the company has enjoyed a high lease renewal rate as most of the tenants seek to renew leases at expiry with residential leases running for 2-3 years, while some leases even run for over 20 years.
“Far Property enjoys high occupancy rate with the Choppies Group taking up 50.2% of the total GLA.
This has been aided by lease negotiation and relationship with tenants,” said Motswedi Securities.
Analysts believe that the high occupancy rates will be maintained in the short to mid-term, but said market conditions and external factors such as the economy and issue of trade permits to some of their tenants could result in the occupancy levels aligning with industry averages.