SBC PROPERTY INVESTMENT RECORDS E12.6M PROFIT

MBABANE – The first of many advantages of investing in real estate is the power of equity. When you own a house or piece of property, it naturally appreciates, or increases in value.

SBC Limited Group investment in Malkerns Square project, a local housing and retail development, augments the business offering by providing residential rental and retail opportunities to prospective tenants. The group recorded a profit of E12.6 million in their property portfolio in the current reporting period.

Released

This was outlined in the group’s results for the six months period ended 30 June 2022, released this week. Total property assets amounted to E1.66 billion in the current reporting period, signalling an increase of over E40 million from the previous reporting period where the group recorded E1.61 billion in property assets. SBC chairperson Thuli Dladla said the residential offering consists of 147 units achieved an occupancy rate of approximately 70 per cent as at 30 June 2022 resulting in a 16 per cent increase in occupancy since the last reporting period December 31, 2021.
Despite the restricted and challenging trading conditions, the consumer lending business posted a 32.3 per cent increase in profits after tax. Dladla said the late completion of the retail centre and phase two of the residential property development, coupled with lower than anticipated initial residential occupancy, slightly eroded the profit after tax, further affected by higher operational costs in the property development portfolio. Despite this, the SBC Group still managed a substantial profit after tax of E29.4m in 2022 from E18.6 million in 2021.

Focus

She said housing remains a key focus area for the group, and they have seen a substantial improvement since quarter three of 2021 in new rentals which have continued during the first half of 2022. “The management is confident that this increased demand is expected to continue and is targeting to reach the 85 per cent occupancy level during the fourth quarter of 2022. “The retail centre is 100 per cent occupied with significant long-term leases in place with Pick n Pay, Pick n Pay Liquor, West Pack and KFC which has performed in line with expectations,” she said. Dladla also mentioned that the group was impacted by a challenging environment in the jurisdictions they operate in.

She said while the first quarter of 2022 was reflective of minimum COVID-19 restrictions and a relatively calm socio-economic environment in Eswatini compared to the 2021 period, Eswatini and Lesotho both being small landlocked countries, have their economies vulnerable to international and regional developments. “Already, poverty, unemployment, inequality and HIV prevalence levels have historically been high with progress toward reducing poverty being slow.

“The recovery is most certain underway, although it is uncertain how long it will take for consumer spending and credit markets to return to pre Covid-19 normalised levels,” she added. The chairperson also mentioned that the group’s continuous focus on achieving strong capital and liquidity positions, continues to assist the growth in both countries, notwithstanding periodic constraints enforced by their ‘prudence first’ approach to managing liquidity.

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