FAR Properties taps into land bank

FAR Properties Acting Chief Executive Officer, Shinu Joy says they aim to grow and develop their current land bank and become the major Southern Africa’s commercial infrastructure property company.

Joy said the company intends to develop the existing land bank in the medium term with mainly small and medium-scale properties. “We also look to reduce debt further to one and a half year of rental income level, exit with profit or expand using available resources when South African markets turn around and develop Zambian land using funds available from existing property and consistent management.”

The company revealed in its 2023 annual report that it is concentrating on growing and developing its current land bank by maintaining the current level of gearing. FAR Property manages over 186 properties across three countries including Botswana, South Africa and Zambia. Joy further highlighted that they will keep the South African portfolio in place for the foreseeable future and seeks to engage in discussions to develop a strategy for debt repayment.

The company’s occupancy rate in Botswana is currently at about 98 percent, while in South Africa occupancy has decreased as a result of Choppies exiting the market. “We are in advanced negotiations to relet the space.”

In his comment, FAR Properties, Executive Chairman Willie Mokgatlhe said the company does not intend to develop shopping malls everywhere but to ensure that the development of the malls and properties are consumer driven and that there are tenants that would support such developments. “We have a sizable land bank that we will develop as and when we identify opportunities, not only locally but also within the region.

Our growth strategy is managed growth.” The company’s revenue increased by nine percent to P 153 million from P 141 million in 2022, while profit before tax increased by 22 percent to P 136 million. Mokgatlhe highlighted that the vacancy rates also contributed positively to revenue as they were much lower than in the previous year. “This was due to effective lease management and leasing of some of the properties in South Africa which were left vacant when one of our key tenants exited the market.”