LLR keeps focus on industrial sector despite shift

KEIKANTSE LESEMELA
Correspondent | Tuesday June 11, 2013 00:00

 

Speaking at the groundbreaking ceremony of LLR warehouse in Gaborone West Industrial site, the company's chief executive, Dimitri Kokinos said although the competition is increasing, LLR has a strong market base as it is focused on industrial development. 'Majority of property developers are focusing into retail but we are looking into industrial because competition has risen in the retail development,' he explained.

Kokinos said they want to enhance their portfolio and create employment for citizens. 'The building was becoming too small for the tenant, Kromberg & Schubert as they expand their operations,' he said. This extension development is geared towards increasing the existing warehouse by another 11,000m2. Upon completion, this warehouse would be about 22,000m2. It would probably be one of the largest warehouses that are single tenanted in Botswana,' he said. Kromberg & Schubert (KroSchu) started operating in Botswana in 2010. The company started producing electrical wiring harnesses for BMW 3-series in 2012. Production of harnesses for new C-Class Mercedes Benz and new VW Polo will start in 2014.  The extension of the warehouse will therefore result in Kromberg's turnover growth by about 80 percent and employment will increase from 1,020 to 1,850.

Kokinos said the construction project would cost P41 million, which is almost 10 percent of LLR portfolio. 'We have a strong financial status so we are going to finance our development and the construction will be complete in seven months time,' he explained. The company owns a portfolio of over P450 million in assets and is listed on the Botswana Stock Exchange.

LLR portfolio mix includes leisure at 42 percent, industrial at 40 percent and commercial and retail at 18 percent.Its properties include hotels, warehouses and factory shells, which the company says, are all financially viable in terms of tenants and stable rental stream.This mix represents a diversified yet balanced portfolio of long and short term rentals in the tourism and industrial sectors.Assistant Minister of Trade and Industry, Keletso Rakhudu said at the ground-breaking ceremony that the government appreciates the role played by LLR and the business community in contributing positively towards the development of the economy. 'To that extent and in many other ways, we feel proud to be partnering with you in our economic diversification drive and we desire to see an increase in such investments from the private sector.

Investments that not only benefit the investor alone, but the kind whose benefits spread across the wider sectors of the economy. These investments help us to achieve the policy objective of economic diversification which is resident in my ministry,' said Rakhudu.