A strong political or policy issue arose during discussions at this year’s The Property and Infrastructure Forum, BotsReal held in the first quarter of 2022. Is acquiring enough land for real estate a possibility or a hustle? The heads which was at Avani Resort and Casino converged on the latter, getting land to develop is a serious jostle.
This is despite deal maker at Rand Merchant Bank Therisanyo Masuga telling the audience at the property forum that real estate transactions is what mostly frequent the counter, amidst and post covid-19. He said there still exists big opportunities in the property sector. Real Estate is seen as the way to go for business ventures and a best long term business.
Masuga said during covid-19 credit appetite has been increasing in real estate. He said real estate has been resilent and there have been no issues in general leases in the local market. Masuga said RMB has been very bullish on real estate hence allowing of credit extension to this sector.
On the securities market real estate remains intact and standing tall like a tall building, a tangible symbol of the sector. Botswana Stock Exchange Head of Product Development Kopano Bolokwe said they also put their head on property. In the local stock exchange the sector was the second best last year. Despite a year faced with lockdowns, uncertainties and turbulence, real estate with its seven listed companies, managed to go high bagging a turnover of over P38 million.
The property market was not left badly scathed even during lockdowns whenpeople stayed home without income to pay rent on residential property; buildings were left unused while malls were closed. Kgori Capital Portfolio Manager Kwabena Antwi said in their large investors in the property sector, there was more flexibility and tenants and landlord met halfway hence the survival of this sector. Sethebe Manake, property expert said rental rates for major malls remain “relatively strong.”
According to Bank of Botswana, Real GDP Growth by Sector and Expenditure in the real estate sector dampened like the rest in the domestic economy with -3.7 percent in the first quarter of 2020 before a recovery to 0.7 percent in the second quarter of the same year, shrugging away from a heavy deficit. The sector is still recovering while counting all the losses of covid-19 and recovered to 4.8 in the last recorded period of first quarter of 2021.
But there remain to be a real real estate issue. The shortage, unavailability of land and government policies seem to be standing on this much viable and long term business venture of property’s way. While economists would say diamonds are not forever, farming may be hampered even more around this era of climate change and most businesses depend on others, property remains the most valuable and wealth enhancing business.
But government would offer small space for hospitals, especially privately owned, owing to regulations that aligns with the state. In a panel discussion at the property forum, Debswana Pension Fund Investment Analyst Mbakisi Gopolang talked of how covid-19 came with opportunities to build more hospitals. He touted their investment on Gaborone Private Hospital which bedded a lot of covid-19 patients meaning the pensioners made more money despite the closure of mines coming with ripple effects to their investments.
A big player in the industry RDC Property Group, executive chairman Guido Giachetti stated that his eyes are already set on the South African, to build clinics. He said he will extend the clinics portfolio to Botswana in the near future.
Another player, a partner at Apex Properties Maje Maje explicitly stated that the issue of real estate not investing in things like private health care centres is the land issue and government policies around them. Changing of land rights and other land regulations remains as an impediment to smooth real estate projects, said Maje.
“It is not easy to get land for a private school for example,” said Maje who also stated that acquiring land for hospitals is still an issue hence why Batswana still go to South Africa for hospital beds while that sub sector could have been empowered for national economic benefits.
There has been an issue of government , deliberately or incidentally, developing the southern part of Botswana more than the north despite the latter having ample of land idle waiting for development. There is also a skewed surface of where land which is owned is and for what purpose the land is used for. Observation is that the northern part of Botswana is less urbanized than the southern. The north has more residential areas than the south.
According to property expert Manake Gaborone and Greater Gaborone maintain the highest sales and transactions in most of these localities are higher than most because they are developing areas.
Kim Bekker, managing director of Seff Properties encourages banks to fund projects outise Gaborone. She also called for lobbying with government, like engaging licensing authorities to be easy on land ownership especially for commercial purposes.
She then encouraged one to own a land anywhere. Bekker said there is no funding but more demand for land at the north. “Just own a land anywhere for when you retire,” she said.
A land policy review done by the African Development Bank on Botswana almost a decade ago stated that Botswana has an unbalanced urban network. “Another factor to note is the slow growth of large urban settlements in Botswana. According to the 2011 National Census Report, peri-urban settlements grew the fastest. Mmopane, adjacent to Gaborone, recorded the highest population change of 339.9 per cent between 2001 and 2011 or an annual growth of 16.0 per cent.
Big urban areas recorded slower growth than the national urbanization rate of 42.9 per cent. Urbanization and growth is fastest in peri-urban areas, where land and rent are cheaper, and in district headquarters, where high-order services and goods are available (Gwebu, 2011),” said the report by the Bank.