RDC complains of challenging retail property market

RDC Properties Chairman, Guido Giachetti said they continue to experience challenging trading environment on its retail segment in Botswana and Mozambique. Despite completing the extension of the XaiXai shopping centre in Mozambique, the company indicated that there has been a setback with Botswana based large supermarket retailer not carrying out the fitting out of their unit. The development started in 2017 on the back of binding expression of interest with this retailer but they could not make a good undertaking. “We are actively sourcing another anchor tenant and remain reasonably positive for the future,” wrote Giachetti in the company’s latest annual report. In 2016, RDC Properties indicated that the group is undertaking retail developments in two sites in Maputo, Mozambique, which would launch Choppies as the main anchor. RDC Properties owns 33 percent shareholding in XaiXai Shopping complex. The project comprises 1,539 square meters of anchor shop and 2258 square meters of line shops. The Xaixai project is accounted to the tune of USD784 000 which is 0.4 percent of the group’s investment and property portfolio prior to revaluation to be done at stabilization. The domestic retail property market remains challenging but the group has been able to maintain the vacancy levels at a very acceptable level of 3.5 percent. However, he said in such difficult conditions the company’s portfolio remained resilient as it has a good and well-balanced income stream. “We are able to be cautiously optimistic about the year ahead as our primary focus is hands on management of the existing asset base and growing shareholder value by identifying potential developments and acquisitions of properties in sectors and geographies with good future growth,” said Giachetti. On his part, RDC Properties Chief Executive Officer, Jacopo Pari highlighted that the trading environment was challenging in line with the region but the group showed strong resilience in its Botswana based portfolio. Rental revenue in the country was up by one percent with the tourism and hospitality sector being the largest contributor while the commercial sector along with retail has been under pressure. The industrial and residential demand was solid throughout the period.