Tycoon Gulaam Abdoola's Turnstar flags 22 percent profit dip on weaker Botswana property values

Gulaam Abdoola is watching his signature investment take a paper hit just as he prepares to hand over the reins. Turnstar Holdings, the Botswana property group the tycoon founded in 2001, has told the Botswana Stock Exchange to expect pretax profit to fall 22 percent to P146.6 million for the year ended Jan. 31, down from P188.6 million the year before.

Abdoola, who owns roughly 14 percent of Turnstar and has run the business for 25 years, is due to step down as managing director at the end of June, with long-serving chief financial officer Comfort Rankgomo in line to take over. The profit warning lands in that transition window, making the headline number sharper than it looks on paper.

The drag is almost entirely valuation-driven. Fair value gains on the company's investment portfolio dropped by roughly P38.7 million, and the board said most of the decline sits in that line. "The decrease is primarily attributable to a significant reduction in fair value adjustments on investment property," directors said in a cautionary statement.

What changed was the math, not the buildings. Turnstar's directors pointed to higher discount and capitalization rates applied to the Botswana portfolio, a technical shift that pulls down carrying values even when rents and occupancy hold up. "This was mainly driven by higher discount and capitalisation rates applied to the Botswana property portfolio in response to prevailing market conditions," directors said.

Strip out the valuation noise and the operating story looks calmer. Operating profit slipped just 0.78 percent, suggesting rents are still flowing and tenants are still paying across Turnstar's mix of malls, offices and industrial space in Botswana, Tanzania and Dubai.

The market context is tougher. Botswana's property sector is wrestling with tighter liquidity, rising interest rates and cooler investor appetite for real estate, the kind of mix that pushes valuers to demand bigger risk premiums and, by extension, lower asset values. Listed landlords across the region are seeing the same pattern.

Abdoola still sits on an 80-million-share position in the company, and Game City Mall in Gaborone remains the jewel of the portfolio alongside holdings in Dar es Salaam and Dubai. He also chairs GH Group, the family conglomerate that gives him a platform beyond Turnstar once he hands over the managing director's role. Whether the discount rate shock is a one-year event or the start of a longer repricing will shape what Rankgomo inherits when he moves into the chair.