RDC opens purse for regional expansion ….despite a blend of economic projections
RDC Properties is surging ahead with its regional expansion push despite a mixed bag of economic growth projections within Southern African region, which impact heavily on their return on investments.
The various expansions were announced by the group Executive Chairman, Guido Giachetti during the interim financial results presentation this week. At least three countries outside Botswana have been targeted to bolster the company’s rental. In Namibia, the listed landlord is planning to build three malls in the coming months.
“In Namibia yields are low, we are looking at long term investments,” said Giachetti at an event where he announced that profit from operations for the six months to June 2017 is up by 6 percent to close at P31, 4 million. The results are up ‘despite challenging trading conditions in the commercial property market’.
Namibia, a former German colony, will see its economy growing by 2, 1 percent in 2017, down from 2, 7 percent that was forecast early this year. This is according to Bank of Namibia, the country’s central bank. Next on the target for expansion is South Africa, which has seen its credit rating status cut to junk this year, paving away for economic and political uncertainties in the Jacob Zuma-led government.
According to Giachetti, RDC is holding closed doors meetings with an unnamed company with a view to acquiring a controlling stake in its properties. A cautionary statement has already been sent out to the market. The deal is at an advanced stage and is awaiting shareholders and regulatory approvals.
RDC (South Africa) is handling the deal, which if it is successful will see an increase of Botswana's listed companies entering Africa’s second biggest economy. The proposed deal in South Africa consists of a shopping mall, two mixed use buildings and a parking lot.
In Mozambique, RDC has opened its purse to fund Xai Xai project which will house retail properties in the Portuguese speaking country. The project will start shortly, after the property company recently obtained a central bank approval to start the funding of the project.
But where will the company get the money to fund these projects which run into millions of Pula? The group will use internal funds as well as external sources, said Giachetti, whose company among others own Chobe Marina Lodge and Isalo Rock Lodge.