10 Apr 2016

Botswana Stock Exchange (BSE) listed property company, Turnstar Holdings, has started to refurbish and expand its properties, Game City in Gaborone and Mlimani City Property in Dar es Salaam, Tanzania.  

Information from the company states that the refurbishment of Game City was expected to be completed by the end of the year.

The project includes refurbishments to existing structures and the addition of a restaurant node, a multifunction entertainment area with a play section for children, an additional 4 000 square metres of retail space and a secured underground parking facility for about 400 vehicles.

Turnstar states that the project was being funded through existing debt facilities.

On Mlimani project, the company states that it is expected to be completed in 2017 and includes the addition of 15 997 square metres of space which comprises retail space, office, conference centre and 342 bays of parking and a hotel.

The company states that a botanical garden will also be developed to complete the attraction of Mlimani City node.

Turnstar states that the expansion is estimated to cost US$45 million and will generate an attractive development yield of 13 per cent in addition to net asset uplift going forward. 

The project is to be funded through a mix of bank debt, internal cash reserves and the issue of up to US$30 million of USD denominated convertible bonds.

Talking about the convertible bonds, Turnstar said it was its strategy to deliver continued capital and distribution growth to its linked unit holders driven by active asset management and portfolio enhancing developments.

It is said the introduction of a diversified funding source establishes a sustainable long term capital structure to support the company’s inherent growth strategy supported by USD cash flows from Mlimani City.

The seven year bond is to be issued next month.

The company has also reported that residential properties at Tapologo Estate and Mogoditshane have undergone facelift.

Furthermore, it has completed the sale of its Fairground Office Park to Botswana Life Insurance Limited for P129 million excluding VAT.

The value of the property was P121.5 million and profit attributable to the lease was P7.5 million. 

The disposal resulted in a decrease of 8.58 per cent in the group’s net assets and a 1.53 thebe decrease in the net value per share.

It is said the proceeds of the sales would be reinvested in further yield-enhancing opportunities.

Turnstar said the sale of the Fairground Office Park was consistent with a strategic imperative to manage exposure to the office property sub-sector in Botswana which is expected to remain under pressure with increasing vacancies in the medium term.

It said its exposure to the subsector has been strategically limited to one office property being Turnstar House which was fully tenanted. Ends