Brian Benza
17 April 2009
Internationally recognised hotel brand Holiday Inn is set to bounce back into Botswana early next year in time to capture visitors coming to Southern Africa for the FIFA 2010 World Cup finals in South Africa.
The hotel is part of a P248 million Masa Towers property development project in the new Gaborone Central Business District (CBD) being constructed by Botswana Stock Exchange (BSE)-listed property concern RDC Properties through a subsidiary called Three Partners Resorts Limited (TPR).
In an interview with the BusinessWeek, RDC group financial controller Jayaram Karumathil said that as at December 2008, the company had invested P37 million into the project with the remainder expected to be obtained from local financial institutions.The renowned hotel management group African Sun Limited will operate the hotel which is set to be opened in March and will have in excess of 150 rooms.
Holliday Inn used to operate in Botswana in the 1970's before it was taken over by Gaborone Sun in 1984. The company has already injected into the project, another P9, 7 million, which accrued from the sale of one of its assets, Professional House in Gaborone.Karumathil said that although the whole project, which includes offices, a cinema and restaurants, is expected to be officially opened by August next year, the hotel should be completed in March.
The offices side will be completed in July next year.In a statement accompanying the company's results for the year ended 31 December 2008, Karumathil said that the total property portfolio including investments and plant and equipment increased to P229 million from P184 million last year, representing a major increase in the size of the Group's assets by 24 percent.
The TPR development, at an estimated cost of P248 million, started during the first quarter of last year and is expected to be complete in August 2010. "The construction contract was awarded after an open tender to the lowest bidder, Italtswana Construction Company (Pty) Ltd. The whole project was re-engineered thereafter to further reduce the costs by achieving savings in excess of P55 million. The property managers have secured pre-letting in excess of 60 percent of the space.
"This includes a lease with African Sun Limited (ASL), which shall be operating a Four-star hotel under the Holiday Inn brand. The hotel will include 157 rooms, a conference facility, swimming pool on the third floor, a lounge and restaurant.
"A lease has been finalised with Capitol Entertainment Centre (Pty) Ltd for a state of the art multi-theatre cinema, including five theatres to cater for the highest and newest digital technology," read the statement.
TPR is also in final negotiations with an entertainment and restaurant chain, which will add to the international flavour of the scheme.
In another development, RDC has announced the postponement of the official opening of another investment in Madagascar, Isalo Rock Lodge, because of the political turmoil in the Indian Ocean island nation. The event will now take place at the end of the year.
Commenting on the financial performances for the year, Karumathil said that the group has experienced a significant increase in the turnover net of the straight line adjustment, from P24, 6 million to P28, 2 million, an increase of 15 percent, compared to the same period last year.
The vacancy level has reduced from three percent at the end of December 2007 to two percent at the end of December last year.
The operating expenses have been kept under control and significant contribution to the profitability of the group is due to the other income, which includes profit on disposal of investment properties, and investment income.
The profit before debenture interest and tax increased from P18.2 million to P29, 6 million, which represents a 63 percent growth.
This impressive result is due to the quality of the portfolio and the surplus arising from the revaluation of investment properties. Mebala, Gaborone West Warehouse and Tholo Properties were independently re-valued during the year under review.
Listed on the BSE in 1992, RDC owns properties in Jwaneng, Maun, Kasane, Palapye, Serowe and Gaborone.
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