COVID-19 dampens Turnstar’s African growth ambitions

The country’s largest listed property company in terms of asset book, Turnstar Holdings, will now focus on the local market for revenue growth, after recording a pandemic-related 13% drop in pretax profits to P81.9 million last year.

Turnstar’s portfolio is currently valued at P2.4 billion with investments in Botswana accounting for 54%, Tanzania with 43% and the United Arab Emirates at four percent.

Turnstar had been eyeing further revenue growth through acquisitions outside Botswana, which would also add the potential of US dollar growth to its property book.

Managing director, Gulaam Abdoola however said Botswana was the focus for the short term due to the instability caused by COVID-19.

“We will continue to focus on growing our revenue in Botswana for the near future,” he said in the group’s recently released Annual Report.

“During this pandemic, we will not focus outside Botswana until such time as economies normalise and different markets can be assessed again.”

He, however, added: “With diversification in mind, the board continues to review various property investment opportunities locally and regionally”.

In Botswana, Turnstar owns wellknown assets such as Game City Mall, Nzano Mall, Mogoditshane Supa Save, Turnstar House, Tapologo Estate and Mogoditshane Town Houses.

Abdoola said despite COVID-19’s impact on tenant’s ability to honour their leases, Turnstar’s assets had continued to perform well, primarily because of the group’s lease management skills and practices that maintained low vacancies.

“Our strategy of working with our tenants during this difficult period of COVID-19 has ensured that we have a high rate of tenant retention and we have maintained 98% occupancy,” he said.

In Botswana, Game City has 97% occupancy, Nzano 100%, Mogoditshane Supa Save 100%, Turnstar House 80%, Tapologo Estate 98% and Mogoditshane Town Houses 98%.

The group’s Tanzanian subsidiary, Mlimani Holdings, reported a fair value loss for its properties last year, compared to a fair value gain in the Botswana properties.

Turnstar executives attributed the Tanzanian fair value losses to vacancies in the commercial office space.

“It should be noted that fair values are calculated on current rentals, projected into the future on a discounted cash flow basis.

“It does not reflect the actual cost of the buildings, and may change from year to year, depending on occupancy levels,” the executives said.

Across its portfolio, the retail assets performed “excellently,” the executives said.