The year ended January 2014 has been an exciting year for Turnstar, a variable rate Loan Stock company that invests in real estate property.
The company has repositioned itself in terms of management, value, earning and growth potential.
According to the company’s 2014 annual report which was released on Wednesday, Turnstar is in a favorable position due to its acquisition of Mlimani Holdings in Tanzania.
This has been made possible by the company’s strategy, through portfolio growth and diversification, of becoming a leading company in the property market not only in Botswana but also internationally.
There has also been a change in its management strategy under the guidance of Managing Director Gulaam Abdoola.
“Increased focus has been placed on controlling costs, and maximising income.
Maintenance of the properties has been prioritised, and as part of this strategy, special emphasis has been placed on ensuring maximum value is derived from funds spent on maintenance”, read the director’s report.
“Turnstar is trading well below its N.A.V and we believe that in time investors will recognise this and the price should improve based on consistent performance.
Growth in the property sector worldwide is difficult to achieve and real profitable growth can be achieved in certain African countries”.
The report further stated that obtaining funding for projects in Africa is also accompanied by its own challenges, but noted that Turnstar is fortunate in that it still has bulk land at Mlimani City to develop.
Mlimani has been a huge success and demand for the units is high and the Turnstar Group is bullish regarding growth in Africa.
Management will therefore examine various funding instruments, in addition to bank loans to fuel its future African growth.
“During the current year, the Company intends to have discussions with financial Institutions, Consultants, and Investment bankers to find a long term solution to fund its African growth.
Although they are many that are skeptical about property markets in the rest of Africa, we at Turnstar are extremely excited by the potential of these markets”, the report continued.
The overall property market in Botswana is flat across all sectors, with a cautionary indication of an oversupply of office and retail space in Gaborone.
There is already evidence of declining base rentals and hardening investment yields due to an oversupply of office space and shopping centres around the city.
Tanzania’s economy is currently the 3rd fastest growing economy in the African continent.
“This growth has led to an increasing number of the middle income group and a growing sophisticated consumer market.
As a result there is a high demand for quality office and purpose built retail centres.
Turnstar is uniquely positioned in geographical diversification across Botswana and Tanzania”.
Turnstar’s core business is to invest in real estate property and generate rental income.
Principal activities include ownership of immovable properties and receipt of rental from properties.
The company has portfolio of retail commercial, industrial and residential properties.