FROM THE GROUND UP
TBY talks to Sydney Popota, CEO of Real Estate Investments Zambia (REIZ), on steps taken to make the company more efficient, the make up of the portfolio, and how that will change over the next five years.
BIOGRAPHY
Sydney Popota is CEO of REIZ. Prior to his appointment, Popota worked as CFO and company secretary. He has extensive experience in the property real estate sector spanning over 15 years. Popota is a Fellow of the Zambia Institute of Chartered Accountants (ZICA) and a Fellow of the Association of Chartered Certified Accountants (ACCA, UK). He has a degree in accounting from Copperbelt University and has finished course studies for an MBA in finance at the University of Lusaka.What have been your key areas of priority since taking over as CEO in 2015?
Since 2015, there have been several developments at REIZ but I had three main priorities. Firstly, I placed emphasis on efficiency; prior to 2015, we outsourced the property management to another company. Now, we do this in-house, meaning we can swiftly deal with issues affecting our tenants and our properties generally. This also tied in with our second focus: costs. With partner property managers, we paid a fee for rental collection, property letting commission, and markup for payments on labor whenever they completed repairs to our properties. By doing this in-house, we were able to reduce our outgoing costs by almost 33%. Finally, I sought to develop our property portfolio again. Since listing on the Lusaka Securities Exchange in 1996, REIZ had consistently been adding new properties to its range; however, since 2012 we have not added any new properties to our portfolio, which means our market share has been shrinking. In order to reclaim this share, we will implement a five-year strategic plan for 2017-2021, which outlines our proposal to grow from 43,000sqm currently to 100,000sqm. While many developers develop properties hoping tenants will occupy on completion, we differ from others in that we will not break ground without having 60% tenant occupancy signed up from drawings.
How do you evaluate your tenant mix, and how is this tailored to suit the demand of your properties?
In retail, we want our tenants to fit the center. People do not come to a mall to see what they can find: their visit to a mall is targeted. We only have one shopping mall in our portfolio at the moment, Arcades Shopping Center. In the retail sector in general, while we see more international brands come in as franchises, we also see greater participation by the corporates themselves as franchises are phased out. We are in the process of having direct links with the key decision-makers of the brands arriving in Zambia to see how we can continue to collaborate. Our low rental rates allow us to achieve and maintain a tenant mix that is sustainable. On the commercial side of things, our tenant mix comes in two parts: the big box takers, with larger spaces for a longer period of time and at a lower rate, and the smaller customer. It is ideal to have a balance between blue-chip tenants and small-time retailers. What is more, we have a healthy variety of local homegrown Zambian and international brands.
What specific expansions and development will the five-year plan entail?
Firstly, within Lusaka, we want to expand the Arcades Shopping Mall from 19,000sqm to nearly 30,000sqm, adding 10,000sqm in two phases. Phase I, a total of 4,500sqm, is currently underway, and a further 5,500sqm will be added two years down the line. Outside of Lusaka, we seek to open in up-and-coming provincial towns, such as Choma in the southern province. We also look at border towns as we see great potential there. And finally, Solwezi is the new Copperbelt, so again, we will focus our attention there. However, in this market it is crucial to find gaps. For example, in Solwezi we will avoid retail as the mall market there is already saturated. Instead, we plan to build offices, residential, and industrial properties. In Lusaka, there are a number of warehousing facilities; however, most of these are not up to international standards. Many foreign brands are reluctant to invest for that reason. REIZ wants to pioneer high-quality commercial facilities in many regions of the country. We are pleased with government's drive to improve the road network, which will open much of the country to new development.
FROM THE GROUND UP
TABLE OF CONTENTS
Year In Review
What A Year
Zambia has long been a bastion of stability in Southern Africa, and while its economy has been rocked in recent years by the falling value of copper prices, a devaluating kwacha, and high inflation, through the Economic Recovery Program the government has bold ambitions to right the ship.
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Convoke, Confound & Collect
Squeezed between a rock and a rather hard place by the slowdown in Chinese demand for copper, by far Zambia's biggest export and government-revenue generator, President Lungu has been forced to get creative in his country's alliances to broaden revenue streams and lessen its dependence on the vagaries of one foreign market.
read articleGuest Speaker
Dr. Stergomena L. Tax, Executive Secretary, Southern African Development Community (SADC)
TBY talks to Dr. Stergomena L. Tax, Executive Secretary of the Southern African Development Community (SADC), on regional economic development, boosting pan-continental free trade agreements, and improving security through mutual development.
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Susan Sikaneta, Ambassador, Zambia to Ethiopia & Permanent Representative to the African Union and Economic Commission for Africa
TBY talks to Susan Sikaneta, Ambassador of Zambia to Ethiopia & Permanent Representative to the African Union and Economic Commission for Africa, on championing peace across the continent, advancing women's rights, and promoting Pan-Africanism.
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Sebastian C. Kopulande, CEO, Zambian International Trade & Investment Centre (ZITIC)
TBY talks to Sebastian C. Kopulande, CEO of Zambian International Trade & Investment Centre (ZITIC), on taming austerity, stimulating sustainable growth, and creating the framework to support entrepreneurship
read articleFocus: Zambia Plus
Adding it All Up
On October 20, 2016, at the 2017 Budget Address, Finance Minister Felix Mutati launched the government's economic recovery program, christened "Zambia Plus." The program is designed to spur domestic productivity, through strengthening ties and collaborating with external donors and developers.
read articleReview: Banking
Macroeconomics Rule the Roost
In its ongoing efforts to diversify away from one principal commodity, copper, the government fosters the development, standardization, and efficacy of the private sector. In doing so the systematic support of the financial universe, especially banks, is vital, as is the goal of financial inclusion.
read articleFocus: SME Growth
IMF support program
An IMF support program stands to provide Zambia with some much-needed discipline on its expenditure and operational efficiencies; however, many caution the need for Zambia to determine what it wants to achieve and how the program will benefit the country.
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Christabel M. Banda, Executive Director, Insurers Association of Zambia (IAZ)
TBY talks to Christabel M. Banda, Executive Director of Insurers Association of Zambia (IAZ), on the evolution of the local insurance landscape, raising awareness, and tackling challenges in the sector.
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Sunny Side Up
As power demand continues to rise and power production continues to fall behind, it's the same old story for Zambia, still wrestling with an ongoing energy crisis. Public- and private-sector drives are seeking to mitigate this deficit by activating the country's solar industry.
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Margaret K. Chalwe-Mudenda, Director General, Zambia Information and Communications Technology Authority (ZICTA)
TBY talks to Margaret K. Chalwe-Mudenda, Director General of Zambia Information and Communications Technology Authority (ZICTA), on new projects, the ZNDC, and expectations for the year ahead.
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Hon. Dora Siliya, Minister, Agriculture
TBY talks to Hon. Dora Siliya, Minister of Agriculture, on the investments being made in agriculture to enable agricultural households, diversifying Zambia's basket of produce, and making international markets more accessible for local producers.
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Hon. Charles R. Banda, Minister, Tourism and Arts
TBY talks to Hon. Charles R. Banda, Minister of Tourism and Arts, on the wealth of tourism destinations within Zambia, efforts to bring more visitors to the country, and what the Tourism Development Fund will contribute to developments.
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