Boidus Focus - Vol 3, Issue 7 [Oct 2013]

OIDUS FOCUSwww.boidus.co.bw

P8.00 (Including VAT)

LOCAL NEWS | page 02

Registered at GPO as a Newspaper | Volume 3, Issue #7

Botswana’s Architecture Design and Urban Landscape Newspaper | O C T O B E R 2 0 1 3

BHC Looks to Cement More Private Partnership Opportuni-ties in Property Development

PROPERTY | page 14

Alternative Investment Oppor-tunities - Energy Sector

SUSTAINABILITY | page 16PrimeTime’s African Expansion Strategy; Interview with Prime-time’s Sandy Kelly

BOIDUS EXCLUSIVE | page 08Establishing the Engineers Registration Board

BOIDUS EXCLUSIVE FEATURE >

Botswana’s private sector has one of the largest returns. A closer look at the an-nual reports of different institutions will show that even with the 2008 global economic meltdown, the private sector in the country still managed to achieve most of the set return. This consistent growth is more evident in the finan-cial services sector but take note that Botswana’s financial services sector is mostly foreign owned, even with those claiming to be locally owned just serving as fronts for the foreign private investors. >>> CONTINUED PAGE 06>>> CONTINUED PAGE 04

by Othata A.O. Batsetswe

Botswana’s Institutional Investors Called to Invest Capital in Local Infrastruc-ture Development

Botswana’s Drive to a Knowledge Economy Pres-ents Opportunities for Property Investment

Botswana’s Property Market Opportunities Re-main Unexplored: Review of Market Statusby Kibo Ngowi & HK Mokwete

The Botswana government has em-barked on a drive to transform the country from a resource–based econ-

BOTSWANA PROPERTY MARKET BREAKFAST FORUM

24th September 2013 at GICC

E V E N T SPECIAL

A Boidus Media Event

At the Property Market Breakfast Forum recently held at GICC, Property Ex-perts delivered critical reviews on the current state of the property market. The discussions highlighted opportunities both current and future but most impor-tantly also highlighted weakness that are beginning to emerge in the Market.

>>> CONTINUED PAGE 02

[Top Left]: Attendees at the event; [Top Centre]: Keith Jefferis from Econsult answering questions from delegates; [Top Right]: Stan Garrun, the Executive Director of IDP South Africa answering questions from delegates; [Bottom]: From left, Ms Tiny Kgatlwane (BIFM), Victor Senye (Chairperson for BITC and BTO), Reginald Motswaiso (CEO BHC), Martin Hoko (Premierwealth), Stan Garrun (IDP South Africa)

by Kibo Ngowi & HK Mokwete

Source: Botswana Innovation Hub

omy to a knowledge-based economy and this move comes with massive opportunities for property investment.

[Top]: Presenter David Tsheboeng from Botswana Innovation Hub; [Bottom]: Presenter Lonely Mogara from BITC

Property Market has generally been a good investment:• Positiverealreturns• Especiallyattractiveinanen-vironmentoflowinterestrates(negativerealrates)

• Animportantassetforbothinstitutionsandindividuals

• Stillalargeamountofinvest-mentinproperty

But imbalances are appearing, markets are distorted• Dangerofoverinvestment• Leadstofallingrentalyieldsandpoorreturnsforinvestors

• Knockonimpactonbanks• Inadequatesupplyofaffordablehousing• unbalancedlending-toomuchlendingforretailandcommercialproperty,notenoughforresidential

Opportunities in Investments through Special Economic Zones Vehicles-BITC

Victor Senye

BOIDUS FOCUSOctober 2013

BREAKFAST FORUM SPECIAL: Local NewsPage 2

by Boidus Admin

Establishing the Engineers Reg-istration Board

LOCAL NEWS FEATURE

The 5th of September was a landmark day for the engineering profession in Botswana that had been 15 years in the making. A special ceremony was held at Gaborone International Convention Centre where the Honourable Minister of Infrastructure, Science and Technology Johnnie Swartz officially announced the commencement of statutory registration of professional engineers. It was way back in 1998 when the Engineers Registration Act was passed in Parliament but this was followed by a decade of near silence. The wheels only truly began turning in 2008 when the Act was reviewed and amended.

The founding Board of Directors was appointed in April, 2010 with a composition including three members from the Botswana Institute of Engineers (BIE), three selected by the Minister of Sci-ence, Infrastructure & Technology, and the sitting President of the BIE as the seventh member. The Board appointed Armando Lionjanga as the first Registrar of the ERB in February, 2011 for a contract period of three years commencing 1st March, 2011. The founding Registrar, who acts as the Managing Director of the organisation, was given this lengthy contract period to allow ample time to establish a functioning organisation.

Lionjanga explains that the main difference between ERB and BIE is that while both organisations seek to ‘promote the highest standards of engineering practice in Botswana’ ERB has the addi-tional mandate to ‘protect the welfare and interest of the public in the engineering practice’ and to do this they have the weight of the law behind them to punish offenders.

The registration of an engineer consists of two parts: firstly, the engineer is registered and thus added to a register of professional engineers within Botswana; secondly the engineer has to apply for a practicing certificate and once that certificate is issued the applicant will be legally allowed to provide professional engineering services. The certificate is valid for one year from the date of issuance and the ERB has the power to strike the engineer off the list and revoke their practicing license in the case of unethical practice or any activities that ‘cast doubt on their pro-fessional ability’. ERB has mandated a one year period for the registration exercise meaning that by 5th September 2014 only registered Engineers will be legally allowed to practice in Botswana.

Lionjanga explains that the biggest challenge he and his colleagues faced in establishing the ERB was financing. So the board continually engaged government to provide additional funding and the call was finally heeded in April 2013 when MIST gave out an additional P5million with the ERB’s annual budget of P1million. Five months later ERB was able to commence statutory regis-tration. However, the ERB has been encouraged to find alternative money-generating activities to eventually become a self-sustaining organisation; the first of these will be the annual registra-tion fees paid by all registered engineers.

The subvention also allowed the ERB to engage the services of a technical advisor in the form of Professor Kai Sang Locke from Singapore who has been involved in the formation of regulatory bodies for the engineering profession in different parts of the world and was commissioned for a ten-week contract to advise on technical issues related to the creation of a regulatory body.

A three-year strategic plan commissioned by a human resources consultancy firm was adopted in May 2012 and suggested that the ERB should have a staff complement of 17 but under budget restrictions this number was revised down to 8 which includes the Registrar, a personal assistant to the Registrar, a Standards Manager, an ICT Manager, a Registration Officer, a Driver, a General Office Cleaner and a Receptionist/Clerk.

Lionjanga is clear on the need for regulatory bodies in Botswana’s construction industry and what he hopes they can achieve: “It’s very important that the professions that are at the forefront of the construction industry – such as quantity surveyors, architects, and engineers – should be regulated by statute to ensure that only qualified and experienced professionals in those disci-plines are actually awarded work in this country. This will weed out the unsatisfactory situation where non-qualified professionals have been coming here and getting away with a lot of murder. This initiative seeks to close that chapter by bringing construction industry professionals into a regulated environment.”

The offices of the ERB are located in Kgale View Terrace, Gaborone and Lionjanga says contact details will soon be available to the public in order for them to forward any complaints regarding professional practice of engineers. The establishment of the ERB heralds a new chapter in the history of Botswana’s construction industry that will go a long way to foster and enforce profes-sionalism, first among engineers and then amongst the other professions that will move towards their own forms of regulation on the back of the momentum generated by the ERB.

Boidus Focus sat down for an exclusive interview with the Registrar of the Engineers Registration Board (ERB) Armando V Lionjanga to gain some insight on the long journey ERB has traversed to become the first regulatory body for construction industry professionals.

Property in Botswana has generally been a good investment generating positive real returns, bene-fitting from the low interest rate environment and proving to be an important asset for both institu-tions and individuals.

However imbalances are appearing that are dis-torting the market: there is a danger of an over-investment leading to excess supply of retail and commercial property. This in turn can lead to fall-ing rental yields and poor returns for investors. The more this begins to happen we may witness rampant business failures which will cause a knock on impact on the banks.

Another imbalance is the danger of excess de-mand for residential property; the inadequate supply of affordable housing in Botswana already has the potential to create serious social problems that will affect the entire economy. There is simply too much bank lending for retail and commercial property while there is not enough for residen-tial. Another concern is that these developments are concentrated in Gaborone while other urban centres of the country remain neglected. And an important point to recognise is that the kind of property investment currently being perpetu-ated doesn’t directly address long-term economic needs – Botswana needs investment in export-fo-cused activities and not enough property invest-ment supports this.

We should also recognise that much of the de-velopment is being driven not by underlying eco-nomics but rather by rules and regulations such as the development covenant on commercial CBD plots; Pension fund rules on local asset holdings in the retail sector; and Land availability and plan-ning/zoning rules for residential property. The role of Parastatals such as the BHC and BDC has also not evolved over time in response to changing economic circumstances.

Overall the positive aspects of the Botswana property market are that it is an active, buoy-ant property sector which provides an invest-ible asset; it is mostly private sector driven; and that there are no evident signs of major financial imbalances. The negative aspects are the unbal-anced development; gaps in affordable housing and development outside of Gaborone; and a tendency towards boom and bust cycles which can be disruptive.

There needs to be a policy evolution in land, zon-ing and planning rules; the role and mandate of Parastatals, particularly BHC and BDC, needs to be updated; the secondary impact of decisions needs to be examined more closely; provision of public infrastructure needs to increase; and there is a dire need to focus on removing or reducing market distortions in order to allow development decisions to reflect real economic and social needs not artificial rules and restrictions.

by Boidus Admin

Property Investment & Construc-tion Expo October 2013

The Property Investment and Construction Expo is a leading expo for Real Estate investment decision-makers from all relevant property and construc-tion sectors brought together in the same place, at the same time. This year it was held at Boipuso Hall between the 11th and 13th of October.

by Kibo Ngowi & HK Mokwete

Botswana’s Property Market Op-portunities Remain Unexplored: Review of Market Status

FROM PAGE 01 >>>

This expo offers you the ideal platform to meet potential new business partners, secure deals, generate product sales and to lay the groundwork for new and existing sustainable business oppor-tunities in Botswana’s Property Investments and Construction sectors.

Source: propertyexpobotswana.com


AdvertisingPage 3

BOIDUS FOCUSMonday 31 October, 2011

AdvertisingPage 16


BREAKFAST FORUM SPECIAL: Institutional InvestorsPage 4

Botswana’s Institutional Investors Called to Invest Capital in Local Infra-structure Development

FROM PAGE 01 >>>

by Kibo Ngowi

The Property Market Outlook for Institutional Investors

BOTSWANA PROPERTY MARKET BREAKFAST FORUM SPECIAL: INSTITUTIONAL INVESTORS

Mr Victor Senye, the Managing Director of Haighs Investments (Pty) Ltd and for-mer CEO of Bifm delivered a presentation on the institutional investors and the Bo-tswana property market.

Haighs Investments (Pty) Ltd is a wholly citizen-owned company established in 2006, with Mr. Victor J. Senye as the Managing Director whose core business is in the area of property development and investment services. The company’s transaction pipeline includes such de-velopments as Airport Junction Mall and Fairgrounds Office Park and Haighs is currently part of a joint venture offering property asset management to the pen-sion industry in Botswana.

The key points Senye highlighted in ex-pounding the virtues of property as a viable investment were: the insufficiency of traditional asset classes to deliver the return; the need for companies to create assets to match the liability profile; the need for companies to seek alternative assets in order to create risk mitigation through diversification; the value of prop-erty as a hedge against inflation; and the value of property as an income stream and source of capital value appreciation.

Senye also highlighted that the invest-ment landscape in Botswana has changed due to a number of factors including: the government revenue base being put under increasing pressure; a significant impact on services resulting from mass

urbanisation and population growth; the impact of globalisation; and efforts by both the public and private sector to stimulate the national economic agenda.

There are important challenges to be overcome however which go a long way to explaining the case of limited local in-vestment in property such as the need for a conducive policy framework; gov-ernment contribution to primary bulk infrastructure; the risk management in-volved in pension fund investing; the fact that control of a large portion of assets remains in the hands of the government; and poor professional supervision of projects.

With all that said there are still great op-portunities in the Botswana property market such as Residential land servicing to feed the high demand for plot own-ership; PPP – First provider of capital to Government utilised properties; Infra-structure development such as dams, pipelines, airports and sewage; and Para-statals land bank development.

My assumption has always been that this massive foreign ownership can also be partly blamed on the limited use of the country’s vast assets and financial returns to stimulate economic diversifi-cation in the country.

The most common challenge has always been that the government still has a heavy hand in in-frastructure development but what is never dis-cussed is the question as to whether the private sector ever ask government where they can pitch. That’s for another day. Ever since the Excellence Strategy the private sector has always remained mum and kept a long distance to participate in the economic diversification drive. For Botswana to develop there is need for an attitude change especially in the Boards that are responsible for making investment decisions. Investment is the ability to add value in service provision.

In Botswana there are many institutional inves-tors, these are considerable large organisations that have considerably large cash that needs to be invested. Institutional investors face fewer

protective regulations because it is assumed that they are more knowledgeable and better able to protect themselves. A closer look at Botswana’s economy shows that there are many organisa-tions partly owned by government that believe their duty is just to make money and pay tax and that’s not enough (and by the way my take is that a parastatal should be self-sustaining within 5 years of being setup). Companies like Motor Vehicle Accident Fund, Botswana Pension Fund, Botswana Insurance Holdings, Debswana Pen-sion Fund just to mention a few have healthy bal-ance sheets and guaranteed returns to an extent that they should have diversified their role in the economy to assist government set up the much needed facilities. The pensions fund manage-ment companies with their guaranteed contribu-tion from government could embark on address-ing more needed infrastructure that the economy needs. The developments at the CBD are sure to cause major traffic congestion problems yet the same private entities building in the area believe it is up to government to put up infrastructure, neglecting the fact that ease of access is crucial to their business success. However an opportu-

nity that exists is that the MVA can instead build bridges that can link government enclave directly to CBD and then have more of those going into

Phase 1, 2 and Block 3, the spaghetti roads. They can then just charge a fee, a minimum fee of P10 for the whole day access. People will always pay for convenience. That way the company gets to have a healthy balance sheet from such a huge investment.

The other area where institutional investors can play a role is in the area of affordable and dignified housing. There is a shortage of accommodation in Gaborone and other areas. The private sector can partner with BHC to construct such affordable housing. If Debswana built 8 houses, two bedroomed houses for P1.2 m then the same initiatives

>>> CONTINUED PAGE 05

by Othata. A. O. BatsetsweBA Economics & Population Studies, Master of Finance & ControlPost Graduate Certificate in Risk Management (EXP), Project Management.[The author writes in his personal capacity]

Sector Opportunity

Infrastructure Road Networks • Gaborone multi-nodal networks (replacing of roundabouts)• Gaborone multi layered transit systems• CBD Road connections and other infrastructures

Energy Coal power plantsAlternative energy systems• Solar plant research systems –Kalahari desert• Ruralelectrificationprojects

Water Dredging Existing Damns New private water sourcesWater Conservation Research• Grey water harvesting infrastructure • Rain cloud making technology research

Housing Affordable housing infrastructure and researchHousing funds and alternative housing Technologies


BREAKFAST FORUM SPECIAL: Institutional InvestorsPage 5

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At NDB we understand the value of property ownership. That is why we offer Bonno NDB Home Loan to cater for all your home financing needs, be it home improvement, buying a house, a plot or building a home.

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Call NDB today and apply! WORKING TOGETHER FOR A BETTER FUTURE

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At NDB we understand the value of property ownership. That is why we offer Bonno NDB Home Loan to cater for all your home financing needs, be it home improvement, buying a house, a plot or building a home.

It’s simple, accessible and affordable to all. *No deposit required.Why not call NDB now?

*Terms and conditions apply


Gaborone >Tel: +267 3952801 | Fax: 3971044 • Francistown >Tel: +267 241 6044 | Fax: +267 241 6065 • Maun > Tel: 686 0316 | Fax: 686 0645 Palapye >Tel: +267 492 0552 |Fax: +267 492 0551 • www.ndb.bw

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by Othata A.O. Batsetswe

Botswana’s Institutional Investors Called to Invest Capital in Local Infrastructure Development can be replicated in Gaborone for the same cost, give govt duty to provide land (terms and condi-tions will apply) then the private sector can build affordable housing to meet the demand. This of course will then call for regulated rental prices

Fund Short Description Estimated Net Worth Some Key Projects

Motor Vehicle Accident Fund

As at 31 December 2011 portfolio market valuewas P2.4 billion with an overall asset allocation as follows:• Equities 55.7%• Fixed income 21.6%• Property Investments 4.7%• Cash & cash equivalents 18.0%Offshore investmentsAssets placed with Blackrock Investment Management increased from P234.6 million ($37 million) in December 2010 to P333.4million ($45.3 million) in December 2011.

The Botswana Pub-licOfficersPensionFund (BPOPF)

As at the 31st March 2012, the assets of this portfolio were invested mainly in equities/shares with a lower allocation to bonds and cash, and alternative investments such as property.

Emerging Market Equities, 20.18%Offshore Hedge Funds, 2.11%Offshore Cash, 1,16%Offshore Bonds 8.53%Developed Market Equities 29.33%

Africa Funds (Domestic Asset Status) 0.73%Domestic Private Equity 5.34%Domestic Property 0.39%Domestic Cash 5.63%Domestic Bonds 9.10%Domestic Equities 17

Botswana Insur-ance Holdings

Sanlam Limited, a multi-facetedfinancialservicesgroup that is highly respected across Africa, is the majority shareholder in the BIHL Group with a 53% shareholding.

The Group has total assets of P12.2 billion.In 2010, Revenue: > Net premium income increased by 29% to P1.6 billion> Fee income increased by 14% to P137 million> Value of new business increased by 16% to P132.3 million

-Ombudsman HQ-2008-SADC Head Quarters-2009-Rail Park Mall-2010

Debswana Pension Fund

The Fund is currently (2010) invested 58% Bonds and Cash, 4% Property. The Fund portfolio investments were in line with and within the pre determined ranges of its strategic asset allocation and rebalancing limits at the end of 31 December 2011.

At 31 December 2010, the Fund value was P3.2 billion, up by P200 million up from previous years’s valuation of P3billion.

FROM PAGE 04 >>> which is what the economy needs right now.

The institutional investors can also make a com-mitment to contribute 0.002 of the total returns to finance critical social projects that the econ-omy needs and these social infrastructure pro-

gramme could entail investing in the smooth running of the sewerage system across the coun-try. The pandemic of breakouts is high that it re-quires a coordinated private sector led strategy and this is also a way of saying ‘thank you’ to the customers because if a pandemic breaks out then

there will be no clients. Other opportunities for such a pooled social responsibility entails see-ing beyond: govt is now worried about supply-ing water to the nation while the private sector is complaining about how business is going to affected. The vision required is not for them to think about slowdown, the continuity models for setting up in a semi arid country entails finding ways to keep going when the rains don’t come.

The private sector could embark on expanding the Gaborone dam by digging it deeper, and in-vesting into research on how evaporation can be minimized. They should be coordinating initia-tives to ensure that there is sufficient water in the dams. What would be wrong with transporting water in the same manner that we buy petrol from South Africa? That’s a private sector opportunity.

The Public Private Partnerships model that most governments are embarking on has always worked well if correctly implemented. The much talked about South African roads are a clear in-dication of how a coordinated planning effort between the private sector and government can always deliver the much needed projects. The SADC HQ is also one of the best models, for P200m. As a finance, economist and risk special-ist a, closer look at the model and plan will cost govt P500m minimum. The PPP model advocates for services to be paid for by the user not the taxpayer as has always been the case, however care should be taken that we do not take a rate of return that is higher than the government’s bond rate as it has always been the case with most charges in Botswana.


BREAKFAST FORUM SPECIAL: Special Economic ZonesPage 6

by Kibo Ngowi

FROM PAGE 01 >>>

The Botswana Innovation HUB (BIH) represents an aggressive strategy to attract science and technology com-panies to set up in Botswana and this presents a golden investment oppor-tunity for property investors. BIH has land to develop ranging from P850 to P1200 per square metre which can be acquired on long terms leases. BIH

also has flexible partnership schemes to share the cost of land and equity with shares drawn out proportion-ally to investment. BIH boasts a total of 41 plots of variable sizes for long term leases to develop and 36 Hect-ares available for spin off businesses in manufacturing & production.

The Botswana Investment and Trade

Centre (BITC) will be the custodian of the Special Economic Zone (SEZ) programme aimed to overcome bar-riers to both trade and Foreign Direct Investment (FDI). The organisations in the area surrounding Sir Seretse Khama International Airport (SSKIA) will be the launching pad for the SEZ programme which in addition to BIH includes Civil Aviation Authority (CAA),

• FullyServicedPlotstotalof57hectares.• Totalof41plotsofvariablesizesforlongtermleasestodevelop.• TenantMix–Science&Technology&RelatedBusinessSupport.• Zoningismixedusedevelopments• 36HectaresAvailableForSpinOffBusinesses–Manufacturing&Production• FurtherSubdivisionOfLand• Primelocation:proximitytotheairport,thediamondtradingcentre,shoppingmalls,BotswanaBureauOfStan-dards,FreeEnterpriseZonearea,

• TaxIncentives,LabourDispensation,SuperiorICTInfrastructure,SuperiorBandwidth

A Science and Technology Park: Partnership opportunities with BIH

Scenario A

Contribution Partner BIH

Land P0Mil P25Mil

Equity/Cash P50Mil P25Mil

Shares 50% 50%

Scenario B


Land P0Mil P25Mil


Loan P20Mil P20Mil

Shares 50% 50%

Scenario C


Land P0Mil P25Mil


Shares 75% 25%

Scenario D


Land 0 P25Mil

Loan/Equity 0 P75Mil

- - -

Shares 0 100%

Diamond Hub and BITC. After this stage the SEZ programme will be tak-en to Fairgrounds Office Park also in Gaborone and then on to other urban centres across the country such as Lo-batse, Selebi Phikwe and Francistown.

Under the SEZ programme interna-tional investors can enjoy a tax holi-day of up to 10 years if the company commits an investment of P5 billion or

more; creation of at least 2500 jobs; at least 15% of turnover spent on R&D and at least 30% of the investment on spin off businesses. At the lower end of the scale international investors can enjoy a tax holiday of a year with in-vestment of at least P156 million; cre-ation of at least 80 jobs; at least 2.5% of turnover spent on R&D and at least 5% of the investment spent on spin off businesses.

Serviced Land (BIH)

SEZ (Special Economic Zones) Selected Sites in Botswana; BITC

Proposed general incentives for SEZs (Special Economic Zones) in Botswana; BITC

• SSKInternationalAirportinGaborone:Multi-useSEZ;CAAB,BIH,BITC,DiamondHub.

• SelibePhikwe:SelibePhikweEconomicDiversificationUnit(SPEDU),BCLPolarisII,Ironsteel,CopperandMetal,Logisticshubetc..

• FairgroundsareainGaborone:FinancialservicesandcorporateHQvillage.

• Lobatse:Beef,leatherandbiogaspark.• GreaterPalapye:Integratedcoalvalueaddition,dryportlogistics,coalpowergenerationandexportSEZinthevicinityof.

• Selebi-Phikwe:HorticulturalSEZintheTuliBlockArea.• Francistown:Mining&logisticsanddownstreamvalue-additionhub.• Pandamatenga:AgriculturalSEZ.

TaxholidayunderDevelopmentApprovalOrderforcompaniesthatmeetthecriteriabelow:

a. 15%taxforcompaniesthatdonotmeetTABLEaboveb. Machineryandequipmentcanbeimporteddutyfreec. 200%taxdeductibletrainingcostsd. Noforeignexchangecontrole. Noincometaxforthefirst5executivepositionsforthefirstfiveyearsf. Automaticissuanceofworkandresidentpermitsthefirstfiveexecu-tivepositionsandsubsequentpermitstobeissuedbySEZA.

g. Moreincentivesarebeingproposedtobettertheeaseofdoingbusi-nessclimateinBotswanaandspecificallyintheSEZsites.

No. of Years

INVESTMENT (Billion Pula)

No. of Job (at least)

% of turnover spent on R&D

Pula Value of Spin offs (of at least)

10 5 2500 15.00 30%oftheinvestment

8 2.5 1250 12.50 25%oftheinvestment





BIH

SEZ

Diamond Hub

Transport Hub

SSKI Airport

Botswana’s Drive to a Knowledge Economy Pres-ents Opportunities for Property InvestmentOpportunities in Investments through Special Economic Zones Vehicles-BITC


AdvertisingPage 7


BREAKFAST FORUM SPECIAL: Boidus ExclusivePage 8

by Kibo Ngowi

PrimeTime’s African Expansion Strategy

In his presentation at the Boidus Property Market Breakfast Forum, PrimeTime Property Holdings Limited (PrimeTime) Executive Director Turnie Mo-rolong, touched on their expansion ambitions for the African region. Boidus Focus sat down for an exclusive interview with PrimeTime Managing Di-rector Sandy Kelly to gain a deeper insight into the company’s moves up Africa.

Within Botswana, PrimeTime Property Holdings Limited is a force to be reckoned with boasting a portfolio that consists of 21 properties spread across the country. Late last year PrimeTime com-pleted its first venture outside of Botswana’s bor-ders with the purchase of two properties from Brit-ish security firm G4S. The purchase is on a ‘sale and lease back’ contract that will run over an initial 10-year lease period. The deal is for two properties, lo-cated in Lusaka and Kitwe, for roughly ZK8 million (P12.5 million), with the intention to substantially upgrade the properties in the near future.

This is just the start of an expansion plan north-wards into the African region that may see the

company get a foothold as far afield as West Af-rica. The countries that the company would con-sider include Mozambique, Uganda, Rwanda, Tan-zania, Kenya and Ghana.

“All the big South African players talk about go-ing into the region but they talk about going in there with R1 billion or $100 million plus,” says Kelly commenting on the large South African in-vestors already active up Africa such as Investec, Sanlam, Liberty Properties, RMB, Atterbury and Actis. “In contrast our strategy is to take bite-sized opportunities which are more easily fundable and less risky. We know that market. We’re probably a market leader with regards to smaller office blocks such as Prime Plaza and smaller shopping malls like Sebele Centre. So the model we have here we believe we can apply there. And because these are smaller chunks we are operating in a space that is too small for the other active investors.”

Kelly says there are three reasons PrimeTime has taken the decision to look outside of the country for opportunities. The first is that the 2008 global

financial crisis was a wake-up call for everyone in Botswana that the country is a single-product economy, reliant on diamonds, so “it would be a mistake to have all our eggs in one basket. We need assets outside the country.” Secondly, there are no less than five listed property funds on the Botswana Stock Exchange along with other major investors active in the country, “so the competition for limited opportunities is very strong. Though Time Projects (PrimeTime’s development manag-ers), does have developments in the pipeline those are too limited for us to rely on solely.” The last and probably most crucial reason is that they have recognised immense property investment/devel-opment opportunities in other parts of Africa. “It’s a good story out there,” says Kelly.

One example Kelly points out as a general oppor-tunity for property players looking into the African region is that of the large demand for low-cost housing in relatively underdeveloped Zambia: “We’ve got the recipe for mass low to medium-cost housing because that’s how Time Projects started with the housing developments in Kgale View and Block 6 and more recently Boiketlo Estate in Phaka-lane, so we’re confident in housing construction.

And these opportunities are going to exist sub-stantially across Africa. If you consider that the population of Africa is going to double by 2050 and both development and urbanisation are on the rise there’s going to be a huge demand for affordable housing.”

There are some difficult challenges in entering these foreign markets however. In Zambia Kelly notes the main challenge is that the government bond rate is 12.5% so you can only get funding re-alistically at 15% which is too high. An even more pressing concern from a property development perspective is that of construction cost.

“In Zambia where there isn’t much skill but the re-sources are available the cost of construction may be 30% higher than what it is in Botswana or South Africa; in Ghana or Nigeria it may be as high as one and a half times but in a place like Angola the cost may be two or three times greater. But then

in East Africa it may actually be cheaper because the resources such as materials and skills are more readily available.”

While plans are still at a speculative stage Kelly notes they are in the process of getting comfort-able with Mozambique following indications from banks such as FNB, Investec and Stanbic at the re-cent Africa Property Investment Summit in Johan-nesburg that the banks can get adequate security on title in that country. However there are con-cerns in places including Mozambique about the reliability of the land tenure system.

“Botswana is very solid in terms of its legal system. If somebody sells you a piece of land you can go to the deeds registry and it’s 100% solid that so and so owns this piece of land. And you can buy it from them or if there’s an allocation of land it’s com-pletely above board. Those things are questionable in certain places such as Mozambique where there have been cases of people being allocated a piece of land from the Governor of the province only for the land to be repossessed for reasons that don’t add up. They’re trying to address those problems. The stories are endless in places like East Africa and Nigeria. You’ve got to do a thorough due diligence check to make sure somebody is actually selling a piece of land that belongs to them. So there are huge challenges in terms of land tenure there.”

These aren’t the only challenges in the region but Kelly and his team are not daunted because for those who can overcome the obstacles the re-wards are sweet: “The opportunities up Africa are good because it’s generally dollar income that people are chasing and whereas you may be able to fund at 6 or 7% cost of borrowing in dollars you may be able to develop at 10 or 11% return on your property. Typically the developers will be developing at 10, 11% and the likes of Sanlam, the long term property investors will be buying at 8% so there’s an opportunity for the developer to ac-tually take the risk and develop. With the dollar returns, borrowing at 6% and getting a long-term return of even 8% does make sense. So we actually need to go out there and do it. It is hard work but the opportunities are there.”

by Kibo Ngowi

Lessons from the IPD Botswana IndexBOTSWANA PROPERTY MARKET BREAKFAST FORUM SPECIAL: IPD BOTSWANA INDEX

Stan Garrun, the Executive Director of IPD, South Africa reflected on what tentative lessons have been gained from two years of producing an IPD report on the Botswana market.

It is important to note that the data collected for the report was from only 7 property funds – Turn-star Holdings, PrimeTime, Letlole Larona, Wharic Construction, Debswana Pension Fund, Bifm and MVA Fund – which is far too small a sample to give a truly representative view of the Botswana property market. Nonetheless the IPD report is still the closest thing to a complete picture of Bo-tswana property available. According to the IPD Botswana Index the return on property in 2012 was a strong 17.9% which was however a fall of 3.1% from the 21% return recorded in 2011.

Residential and industrial property have been the best performing sectors off a base of high capital growth. Office sector trailed behind all the sectors although it posted a positive capi-tal growth. Low vacancies were recorded across all the sectors in Botswana while office tops the list with an annual average vacancy rate of 1.9%. Operating costs in all sectors still stable except in the retail sector which registered a slight increase. Globally, Botswana was one of the emerging markets which recorded a significant property growth in 2012.

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African returns globally attractive

Contributors to the database:


AdvertisingPage 9

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DIYPage 10

DIY Projects - OUTDOOR GRILLING AREA Sponsored by

TIPS FOR AN OUTDOOR KITCHEN

Outdoor kitchens have certainly become one of the hottest items in home building in the last few years. You can get the same options from your indoor kitchen and you can put those things in your outdoor kitchen. For example, you can get cabinets, grills, refrigerators, but there’s one thing that’s totally different — everything has to be waterproofed.

Outdoor Cooking Options:A BBQ grill is the most popular choice for outdoor cooking, but there are other outdoor cooking options:

Fireplace - A fireplace outside can easily be transformed into a place outside where you can cook. The idea of being able to congregate around this outdoor fireplace and cook really adds to this outdoor room feeling.

Firepit - More casual than a fireplace, a firepit can be used to cook - with a rotisserie, skewers or a grill over an open flame.

Outdoor Oven - The outdoor oven that you “may” want to consider is more of a traditional oven—a brick or stone pizza oven, for example.

Countertops and Storage Cabinets:For the countertop in your outdoor kitchen two options are brick or stone.

Countertops - The counter space can also be used to eat on. Usually when you are planning for an eat-on counter, you want to make sure that it’s at least 15” deep and approxi-mately 24” wide per person.

Storage Cabinets - Storage cabinets need to be water-proofed on an outdoor kitchen, and there are many woods that are resistant to rot - such as redwood. Stainless steel that matches a grill, for instance, is another good option for cabinets.

Sink - No kitchen would be complete without a sink. Outdoor sinks are either fed with a hose or connected to the home’s water supply. Good choices for your outdoor sink would be either stainless steel or ceramic.

Other Considerations:You might want to consider keeping your kitchen sheltered from the elements.

Shelter - You can definitely have a shelter over your kitchen area, but experts wouldn’t recommend having a ceiling or shelter over the grill area because of all the smoke.

Flooring - You must try to avoid using flooring that is slick, which eliminates tile or marble right off the bat.

Source: diynetwork.com

DIY PROJECT: HOW TO BUILD A CABINET FOR A GRILLING AREA

Step 1: Prepare the Frames - Since one large unit would be unstable and inefficient, construct three sepa-rate units to house the outdoor grill and refrigerator. Cut twelve 18” long 2x2’s and eighteen 28” long 2x2’s. Use a nail gun to connect the 2x2’s to cre-ate the face of the cabinet as desired. Nail the three separate frames together to form one unit.

Step 2: Create the Inserts - Cut press-treated plywood to create the in-serts according to the size of the frame that will be installed once the cabinet frame is put in place. Staple the wood inserts together to form the shelving. (Use a minimal amount of wood glue if necessary). Place the cabinet unit in place on the deck, and install the inserts.

Step 3: Finish the Cabinet - After the granite is attached, slide the grill and the refrigera-tor into place. Apply an oil-based, orange-tinted stain to the shelves of the cabinet and allow it to dry.

Step 4: Attach Cement Boards to the Cabinet - Use a power drill to attach cement boards to the outer frame of the cabinet. Add big pieces first, then smaller pieces for the thinner areas around the cabinets. Because the unit is covered in a man-made cement board, real cement cannot adhere directly to it. Attach a wire lath with concrete screws to create a surface for the stucco – add big pieces first, then smaller pieces for the thinner areas around the cabinets.

Step 5: Add the Mortar - Following the instructions on the bag, mix mortar to perfect consistency. Apply a base coat of mortar mix (1/8 to 1/4 inch thick) to the back, front, and

sides of the kitchen cabinets. Lightly run a rake along the base coat (this allows the final coat to firmly bond to the lampposts).

Step 6: Add the Stucco - Allow the base coat to dry before applying the colored stucco. While the base coat is drying, mix sand into the mortar until the stucco color you desire is created. Then, cover the base coat with a layer of stucco and ‘tipple’ the surface with a brush or sponge. Lightly run a trowel across the stucco to smooth the ‘pit-ted’ surface. Allow ample time for the stucco to dry.


AdvertisingPage 11

Verec is a wholesale electrical distributor established in 2002 to supply products for home and business. In the face of increasing crime rates in Botswana Verec management recognised the market need for tighter security solutions. Their response was to expand their business to include top of the range security products in 2010. “We advocate that to secure your home secure the perimeter,” says Verec Managing Director Sean Taylor. “When someone is inside your house it’s already too late. With our alarm systems we protect your house so if anyone comes over the fence it will either alert you by a siren and a text message or just a siren depending on your preference.”

Another important feature of this security system is the panic but-ton inside the home. In case an intruder does manage to enter your compound pressing the panic button sends a distress message to up to five specified friends and family. Additionally Verec supplies and installs CCTV cameras with a special feature that allows the homeowner to view their compound from anywhere with internet access as long as their home has a wireless internet facility. The convenience of this feature is unparalleled because it means that one only has to log on to the internet to check on the safety of their home and this can be done from almost anywhere.

Mr. Taylor doesn’t hesitate when confronted with the question of what sets his company apart from others of its kind in Botswana: “Technical bias – We’re very strong technically. Usually when a lay-man goes into one of these stores and asks a question, he doesn’t get the answer he wants because the person helping him doesn’t know the answer himself. If you come in and tell us what your problem is we’ll offer you a solution. So whereas a lot of companies only have the product, we’ve got the product knowledge as well. All my guys are trained in a certain field. We have in-house training regularly with technical personnel. And we are always keeping up with technology.”

Mr. Taylor proudly states that the company employs more than 20 peo-ple, the vast majority of whom are local. Verec is located in Commerce Park, unit 7, Plot 170 and is open Monday to Friday, from 7:30am to 1pm and 2pm until 5pm; and on Saturday from 9am to 1pm.

Verec – “Secure your home secure the perimeter”


LightingPage 12

LEDs, or light-emitting diodes, are energy-saving light sources that last for years and offer tremendous flexibility for your design project. They can be used for task lighting, general room lighting and accent lighting. Here are some sensible-style ways to incor-porate them into your kitchen.

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LEDs make great accent lights for floating shelves. Their slim profile makes them ideal for this application. Recessed ceiling lights are a primary source of room

illumination in many kitchens. Traditionally, they’ve used halogen or other incandescent sources. New remodeling kits let you replace those fixtures easily and more affordably with long-lasting, energy-sav-ing LEDs. Another benefit: If your ceilings are high, you may not ever have to drag out the ladder again to change a bulb: LEDs can last up to 20 years.

Glass countertops can be lit from below by LED lights. They provide dramatic accent lighting for a glass countertop's beautiful translucent surface.

Toekicks are a great place to add LEDs to your kitchen. They can provide both accent lighting and nighttime illumination

LEDs can be used to highlight architectural features, like the tray ceiling or cove molding in a traditional kitchen.

Under-cabinet lighting is an ideal ap-plication for LED lights. Unlike halogens, LEDs stay cool, so your hands don't get hot while you're working below them.

If you're showing off your serveware or collect-ibles in glass-fronted cabinets, consider lighting their interiors with LEDs. Options include rope lighting that can hide behind faceframes or puck lights that hide in the cabinet tops. Glass shelves let the light flow from the top of the cabinet to the bottom.

You don't have to limit your cabinet interior light-ing to accent only. LEDs, like Hafele's Loox system, shown here, can be used as task lighting for drawers, deep bases, dark corners and other areas needing more illumination.

LEDs installed behind a translucent back-splash - like glass or this Varia Ecoresin from 3Form - is an ideal accent light application.

Pendant lights con-tinue to be popular in kitchens, especial-ly over islands and peninsulas. Happily, there is an increas-ingly large selection of LED-powered pendants that save energy while not stinting on style.

Once reserved for dining rooms and ballrooms, chandeliers have become popular fixtures for kitch-ens, too. If this is the look you're seeking for your traditional kitchen, consider shopping for an LED-powered fixture. The selection, while still small, is growing every year.

Some ceilings cannot accommodate recessed lights, or are too high for them to provide enough functional illumination. In these situa-tions, you're likely going to use track, cable or monorail llights, as shown here. New models are being introduced that take advantage of LED energy savings and durability.


BREAKFAST FORUM SPECIAL: Emerging African MarketsPage 13

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by Boidus Admin / Source: www.broll.co.za

GLOBAL ECONOMIC OUTLOOKThe outlook for an upturn in world growth in 2013 is brighter than that of 2012 when the risk lay with renewed recession across a number of major economies.Economic conditions improved modestly in the third quarter of 2012 (Figure 1), with global growth increasing by approximately 3 percent. The main sources of acceleration were emerging mar-ket economies, where activity increased broadly as expected, and the United States, where growth exceeded expectations. Finan-cial conditions stabilised, while bond spreads in the Euro area declined and prices for many risky assets, notably equities, rose globally. Capital flows to emerging markets remained strong.

African Emerging Markets Outlook www.broll.co.za

The annual Broll property report 2013

Africa’s leading property services provider

The retail, office and industrial property markets

www.broll.co.za

3The annual Broll property report 2013 >> global economic outlook CONTENTS

economic conditions improved modestly in the third quarter of 2012 (figure 1), with global growth increasing by approximately 3 percent. the main sources of acceleration were emerging market economies, where activity increased broadly as expected, and the united States,

where growth exceeded expectations. financial conditions stabilised, while bond spreads in the euro area declined and prices for many risky assets, notably equities, rose globally. capital flows to emerging markets remained strong.

The outlook for an upturn in world growth in 2013 is brighter than that of 2012 when the risk lay with renewed recession across a number of major economies.

Sourced from oxford economics/imf report

glObal ECONOmiC OuTlOOk

Figure 1: gloBAl gdp growTh Figure 2: gdp ForecAsTs, % pA

8%

7%

6%

5%

4%

3%

2%

1%

0 2011 2012 2013

World Advanced economiesEmerging & developing economies

8%

6%

4%

2%

0

-2%

2013 – 2017 Difference to trend

Brazil

Poland

U.S. (Moody’s)

Austra

lia

Nordics

U.S. (EIU

)

Japan

Gernm

any

Eurozone

Hong Kong UK

Singapore

SpainChin

a

source: imf staff estimates sources: economist intelligence unit

www.broll.co.za

3The annual Broll property report 2013 >> global economic outlook CONTENTS

economic conditions improved modestly in the third quarter of 2012 (figure 1), with global growth increasing by approximately 3 percent. the main sources of acceleration were emerging market economies, where activity increased broadly as expected, and the united States,

where growth exceeded expectations. financial conditions stabilised, while bond spreads in the euro area declined and prices for many risky assets, notably equities, rose globally. capital flows to emerging markets remained strong.

The outlook for an upturn in world growth in 2013 is brighter than that of 2012 when the risk lay with renewed recession across a number of major economies.

Sourced from oxford economics/imf report

glObal ECONOmiC OuTlOOk

Figure 1: gloBAl gdp growTh Figure 2: gdp ForecAsTs, % pA

8%

7%

6%

5%

4%

3%

2%

1%

0 2011 2012 2013

World Advanced economiesEmerging & developing economies

8%

6%

4%

2%

0

-2%

2013 – 2017 Difference to trend

Brazil

Poland

U.S. (Moody’s)

Austra

lia

Nordics

U.S. (EIU

)

Japan

Gernm

any

Eurozone

Hong Kong UK

Singapore

SpainChin

a

source: imf staff estimates sources: economist intelligence unit

Growth in emerging market and developing economies is on track to reach 5.5 percent in 2013. Nevertheless, growth is not projected to rebound to the high rates recorded in 2010–11.

Supportive policies have underpinned much of the recent accelera-tion in activity in many economies. Given the assumption of lower commodity prices in 2013, weakness in advanced economies will un-doubtedly weigh on external demand, as well as on the terms of trade of commodity exporters. Economic growth in sub-Saharan Africa is expected to remain robust, with a rebound from flood-related output disruptions in Nigeria contributing to overall growth in the region

in 2013. As the Eurozone and US economies recover, there is clearly potential for companies’ earnings and share prices to rise further. This in turn could have a positive indirect effect on financing conditions as banks become more inclined to lend to households and companies.

SUB-SAHARAN AFRICA- Comparable property trends

The annual Broll property report 2013


BREAKFAST FORUM SPECIAL: PropertyPage 14

by Boidus Admin

BHC Looks to cement more Pri-vate Partnership Opportunities in Property Development

A neglected avenue for development opportu-nities in Botswana’s growing property market is the Botswana Housing Corporation (BHC) private partnership scheme. Speaking during his pre-sentation at the Boidus Property Market Break-fast Forum BHC CEO Mr. Reginald Motswaiso explained that the parastatal is willing to enter partnerships with private entities to develop

BOIKETLO ESTATE; Construction of 147 houses in Phakalane in partnership with Time Projects

This is a partnership between BHC and Time Projects (Pty) Ltd. The partnership is develop-ing some 147 housing units at Phakalane for sale to the general public. As at end of March 2008 some 114 plots had been sold.

The development period for the land which

was originally bought from Phakalane Estates expired early last year. The development pe-riod was renewed for 1 year after an amount of P1.5 million was paid to Phakalane Estates.

The partnership recorded a profit of P790 267.00 as at 31st December 2007.

GALO SHOPPING MALL in Partnership with Plaza Centre

The partnership is between BHC and Plaza Centre (Pty) Ltd. The partnership is running a commercial centre in Francistown trading un-der the name and style GALO. By the end of March 2008 the centre was 99% occupied.

The partnership made a profit of P1.63 million as per its audited financial statement for the year ended 30th April 2008. The partnership recorded a profit of P799 267.00 as at 31st December 2007.

LOT 5129 in Partnership with Time Projects

The audited financial statements for the part-nership for the financial year ended 31st De-cember 2007 show that the partnership made a small profit of P724 740.00 compared to last financial year’s loss of P20 451.00.

The partnership is between BHC and Time Projects (Botswana) (Pty) Ltd. The partner-ship is running an office building on plot 5129 Gaborone. The office block is fully let to Bank Gaborone.

property and has done so with considerable suc-cess in the past.

Some of the property developments BHC has completed with private sector cooperation in the past include the construction of 147 houses for the Boiketlo Estate in Phakalane and the Lot 5129 Office Park in Central Gaborone both through partnerships with Time Projects. BHC has also collaborated with Plaza Centre to develop Galo Shopping Mall in Francistown and Lot 7 in Gabo-rone Station.

Motswaiso explained that potential partners can approach BHC with land or capital investment and the partnership can take the form of an equal partnership in which parties equally share in the proceeds of sale or rental or a non-equal partner-ship where investment by the parties is not equal and they share in the proceeds in a way that is proportional to their investment.

CHALLENGES• Sourcing of funds for developments• Cost of construction – affordability• Availability of land in strategic areas • Lack of infrastructure

FUTURE OUTLOOK• Look for more partnership/ joint venture op-

portunities • Consider Cluster/ Gated residential develop-

ments/ Sectional Titles• Consider packaged developments


BREAKFAST FORUM SPECIAL: Real EstatePage 15

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Real Estate Institute of Botswana is the leading professional body representing the interest of Property Surveyors. It promotes and encourages high professional and ethical conduct in respect of the profession concerned with the manage-ment and development of land and property.

A Brief Background

The Real Estate Institute of Botswana was estab-lished in 1994, primarily due to unsavoury behav-ior of certain individuals who robbed the public of their hard earned money by masquerading as

qualified and experienced property profession-als. The formation of the Institute was against the backdrop of unprecedented high growth rates of the economy in the late 80’s and early 90s which led to Kgabo Commission. The Kgabo Commis-sion focused on land problems in Mogoditshane and peri-urban areas. Visionary members of the profession in the country saw a need for serious intervention to protect the image of the profes-sion and restore public trust. What was to follow was sustained advocacy for consumer protection and lobbying of government by the Institute, which led to the enactment of the Real Estate

Professionals Act, which established the Real Es-tate Advisory Council with the responsibility of certification of Property Professionals. The Real Estate Institute of Botswana is the only recog-nized professional body in Botswana represent-ing the interests of the property profession.

Objectives

To unite in one body all persons participating in the profession of an auctioneer, estate agent, valuer or property manager.

To promote and encourage high standards of professional practice in relation to property valu-ation, estate agency, property management, property auctioneering and related activities by;

i. Establishing and maintaining a code of pro-fessional conduct and practice for members and,

ii. Preventing illegal, dishonorable, improper and objectionable practices by members and,

iii. Providing opportunities for the acquisition

by Boidus Admin

Real Estate Institute of Botswa-na (REIB); an Overview

and diffusion of knowledge relating to all ac-tivities in (A) above and related subjects and,

iv. Promoting such legislation as may be neces-sary to achieve the proper control of all per-sons engaging to wish to engage in any of the activities in (A) above.

To promote proper conduct and good relations between members and provide for the amicable settlement of disputes among members.

To protect and promote the interests of mem-bers, the property professions, and the public in relation to any of the activities of members in-cluded in (A) above.

To promote legislation and amendments to the law in relation to any of the activities in (A) above.

To establish and maintain good relations with other professional bodies in Botswana, to estab-lish links with similar societies in other countries and support any international bodies with similar objectives.


BREAKFAST FORUM SPECIAL: SustainabilityPage 16

This month’s column is in line with Boidus Media’s recently held Botswa-na Property Market Breakfast Semi-nar that was underpinned by the IPD report and addressing at length, the alternative investment opportunities that are part of the property/develop-ment value chain.

The Southern Africa Development Community has an abundance of en-ergy resources; however it is lagging behind the rest of the continent in electrifying its rural settlements and providing adequate power for its com-mercial centres. Only 24% of rural set-tlements in SADC are electrified com-pared to the 36% managed by the East African power pool and 44% by West Africa. Wider access to power services is still a challenge and an even greater challenge to investment.

That said, there are efforts being forged to bridge the energy gap. The big debate is; how to best go about

by Phenyo Motlhagodi

Alternative Investment oppor-tunities - Energy Sector

SUSTAINABILITY TODAY

it and take advantage of the invest-ment potential that exists within that gap. The SADC region currently has in-stalled power capacity of 55 Giga Watt of which 74% is provided for by coal, 20% by hydropower, 4% by nuclear and 2% by diesel according to recent stats. There are plans in place to grow the grid so that peak loads go up to 77 GW by the year 2020 and then 115 GW by 2033. This is where the invest-ment opportunity is presented, and equally, the challenge. As exciting as all this sounds, the biggest hurdle cur-rently is policy and its certainty, or lack of. Its coherence too is a major factor. Even though different SADC member states seem to be formulating policy for sustainability, in the general sense, cutting across energy i.e. South Africa and Botswana, there is still great need for real investor assurance on the sta-bility of the energy sector. There needs to be set policy essentially so that it does not seem to be self-contradictory or contradicting any policy that ad-

dresses sustainability. In the last issue I spoke at length about this, drawing comparison from the rest of the world and bringing it back to Botswana to say; it is welcomed that we are now looking at regulatory bodies in as far as buildings, Climate Change and the more general sustainability issues, but it is crucial that the left knows what the right hand is doing, especially if the different bodies and their policies should be complimenting each other. This is the only way that the investor can start to consider any state or re-gion in a serious manner.

Infrastructure development has been one of the biggest constraints too. The said challenges in mind, investment potentials, targets and projections etc. The frustration is that, as it is, industrial productivity is steadily growing in the region (Botswana included) and the World Bank is said to have anticipated an increase in electricity demand by 40% over the next 10 years. All of this

is happening parallel to the urgent need of improving the quality of life in the rural areas by electrifying them. Some progress is with the hydropower plants in Mozambique, DRC, Lesotho and along the Zembezi River. There is a lot riding on this energy fulfilment i.e. the relationship between energy supply and country GDP growth. As economists have been saying; with-out power, there is no investment. As it is, the estimates are that out of 365 days, at least 55 are without power. A quick survey on any business sector or category that depends on electricity will show you how much they lose per day in Pulas using say a diesel backup generator. One local car dealership said they were spending a minimum of BWP 1200 per day during load shed-ding as is still the case in some areas like Mochudi.

Going forward in the energy invest-ment case for SADC some experts have strongly called for African solutions in addressing our challenges. This is purely based on the huge size of Africa compared to USA, China etc. and oth-er African dynamics (our challenges are unique to us). This will determine what will be a reliable energy source for us. The argument here is that Af-rica must steer clear from the idea that renewables can substitute the traditional source (coal) to supply our core power demands. The one solu-tion then given is that on the basis the Chinas, USAs and Canada’s’ develop-ment (150 years)has been through or partly coal mining, developing coun-tries like Botswana be allowed to con-tinue to use coal as the world looks for a greener solution. Renewables then for Africa must be dedicated to rural settlements. The West would have to swiftly have move to renewables as the have enjoyed a development head start. Some say, nay, this would further provide the West with more opportu-nities if we lag behind i.e. employment in green economy.

To some extent one corner is saying; there is great investment potential, but maybe not now and maybe not as grand as we see. In the case of Bo-tswana, there is still much to be done even in the traditional sense as we still struggle with our supply via BPC and the Morupule ambitions. Is it then time to look at the issue of privatisa-tion? There are lessons from some of

Africa, in the past week Nigeria had a significant hand over of about 15 pow-er stations to private firms. So some African solutions have been along that line of thinking; deregulation of the industry to allow for private par-ticipation. Currently only 17 countries have done so and those in the know say it is nearly not enough to entice investment either. Private firms are driven by profit, obviously with risk, but the risk needs to be palatable too. Where we are today is gloom as the state power supplier is not only the supplier but the regulator too any this situation is synonymous with Africa. In going forward, what is clear is that with all the mining springing up again through Botswana and Africa, we have to be realistic, especially with the fig-ures and facts in front of us and apply a great sense of businessman-ship in our navigation.

In looking at what would be ideal, some of the solutions thrown forward and the challenges we face; the short to medium term is not going to be a multi country grid (collaboration) to get the power up or to be used as an approach to get investment. This would mean a tedious exercise of getting through the different African regulatory framework before we could realise a drop of the finances. Unless the states fund it themselves, the hic-cup there though is the African deficit. Countries in that regard are first told to sort out their own infrastructure. This however is just one school of thought.

The essence of this month’s column was to put forward some facts, cur-rent discussions and expert opinion to stimulate some real debate in going forward and looking at alternative in-vestments in Africa, particularly within energy. This comes at a time when coal mining is a huge conversation. Now go on, discuss and by all means, invest. But one certainty will be that whatever Africa’s move is in energy, it will have to be an appropriate tech-nology for us. It could certainly be an energy mix (gas, nuclear, coal, wind, solar and hydro) but it has to be sen-sible or the investment potential will disappear.

Follow Phenyo online:Twitter: @PhenyoOnRadio Facebook: Phenyo Motlhagodi

Source: renewableenergymagazine.com

tel: 3922795 | fax: 3924923 | email: [email protected]

20MW Gemasolar Plant: highest value of any production solar plant in the world [Source: theenergycollective.com]

Torresol Energy has announced the commissioning of its Gemasolar CSP electrical plant. It went on-line 5/24/2011, with a maximum output of 19.9 MW, and 15 hours of thermal energy storage, which allows it generate power 24 hours per day many months per year. The plant (formerly called Solar Tres when the business partners were different), is located near Se-ville, Spain (the Andalucía region).

The annual electrical output of 110 MWh/year equates to a capacity factor of 63.1%. This is the highest value of any production solar plant in the world. This is not quite baseload, but it would need half the fossil fuel backup of PV technology. It would also have one third of the transmis-sion cost of PV (making the best solar choice for projects

like http://www.desertec.org/ ). The secret of the high capacity factor is the sunny location (expected 270 productive days/year), and a solar field that is so over-sized that significant summer collection is discard in order to get more operating hours during the rest of the year.

Gemasolar is the first commercial central tower plant equipped with a molten nitrate salt thermal energy storage system, first demonstrated by the US DOE at the Solar Two plant in Barstow California in 1998 (ignoring the very small French Themis experiment). The Spanish engineering company SENER (part owner of Torresol) has apparently developed their own molten salt technology since Boeing/Rocketdyne (which built the Solar Two receiver) left the project.


AdvertisingPage 17

PROPERTY FACTS• Only20housesavailable• Totalfloorarea–170m²• IdeallocationonthefootofahillinThema2,Lobatse• Spaciousthreebedroomedhighincomehouseswithmasterensuite• Plotsizeranges–894m²-1332m²• Modernfurnishesi.e.porcelainfloortiles,ceramicwalltiles,bathtub,shower• Fittedkitchenwithgranitecountertops• Motorizedgarage• Partiallypaved• Selfcontaineddetachedservantsquarter• PriceRange:P1,168,160.00-P1,192,800.00

Detached servants quarter at rear of plot

Spacious Living Open Plan Kitchen / Dining Built in wardrobes Modern furnishings

TYPICAL PLAN1. LivingRoom2. OpenPlanKitchen/Dining3. MasterBedroom(ensuite)4. Bedroom25. Bedroom3

Front View of Typical High Income House

PROPERTY INVESTMENT OPPORTUNITIES AVAILABLE IN LOBATSE, THEMA 2

...the panoramic view of lobatse

The Botswana Housing Corporation invites citizens and majority citizen owned companies to apply to purchase properties from our new project at Thema...

YEM Graphics

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P.O. Box 412, Gaborone, BotswanaTel: +267 360 5100 Fax: +267 395 2070Email: [email protected]

BHC Lobatse Contact:Tel: +267 533 0460


BREAKFAST FORUM SPECIAL: Editors NotePage 18

gabanaarchitects

Plot Number: 2930 Pudulugo Crescent, Extension 10, Gaborone Botswana Opposite University of BotswanaPo box 50933 Gaborone Botswana Telephone (+267)3915981 Cell: 75225633Email:[email protected]

gabanaarchitects


gabanaarchitects


EDITORH. Killion Mokwete

COPY EDITORPeta McAdam

DESIGNBridget T. MacKean

Boidus Team

by H. Killion Mokwete, RIBA Chartered Architect

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send your details to:

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B O I D U S F O C U SBotswana’s Architecture Design & Urban Landscape Newspaper

Gratitude and Reflections on Breakfast Seminar

EDITOR’S NOTE

GABORONE

KILLIONT: +267 75505291E: [email protected]

FRANCISTOWN

WADAT: +267 71480679E: [email protected]

This edition of Boidus Focus focuses on the recent Botswana Property Breakfast Seminar recently organized and held at GICC on the 23rd of October. The event which was planned and executed around the notion of opening a window into Botswana’s property market to the region was a success and thanks to our sponsors and partners, it was also viewed by regional viewers across the continent on CNBC Africa. This marked the first time that a property related event from Botswa-na was made accessible to the international audience. For us, the lo-cal property market in Botswana remains lucrative and has matured enough to want to reach new heights and penetrate new opportuni-ties within the region. The local market in pursuance of FDI and op-portunities within other emerging markets needs to find a place of its own, where mostly the South African counterparts are already domi-nant with practically no competition.

A good few local firms within the listed property space such as Prime-Time, Turnstar, Narprop have already seen and grabbed opportunities outside our borders. This presents for us as Boidus a good platform for which we can begin exploring broadcast opportunities to tell this story to the international investor, hence our partnership with CNBC Africa. Our partnership with CNBC A above all is based on exploiting their market reach dominance across the region through print media (Forbes Africa), Digital (ABN Digital and Television, (CNBC A Channel). Through these platforms we will continue to leverage opportunities for business across Botswana and we hope your business can become part of our clientele as well.

JOURNALISMKibo Ngowi

SALESH. Killion MokweteThabo Sarona

DISTRIBUTIONRoy Selebalakhai

GUEST COLUMNISTSOthata BatsetswePhenyo Motlhagodi

PHOTOGRAPHYMokgweetsi Phetabosigo

Reflections on the Breakfast SeminarBreakfast Seminar Sticking Points1. IPD Data

a. What the fall meansb. Less companies submitting data

means less reliability of the datac. IDP data alone not enough to give

insight into market.2. How high can she Fly-Are

Professional Industry Bodies Need to step off the fence The local building industry scene is slowly but surely developing its own platforms for interaction such as our recently held Botswana Property Breakfast seminar, CBD Executive Seminar, Property Expo and others. All these platforms are a testimony of our local markets coming of age and more importantly offer various platforms for the property investor to network and share ideas.

Our local professional bodies however need to take a proactive role in participating, partnership and acting as necessary patron to all of these initiatives.

It is no good to always talk of a troubled industry, with recession, professionalism issues, lack of access to regional markets and yet we shun platforms meant to offer a springboard out of such. At all the past events, we have had support from the professions but not satisfactory. An event or offer of platform to discuss issues of real estate ought to pack a room full of Real Estate players in the industry to discuss their bread and butter issues. We however have time and again witnessed other institutions that do business attending and supporting initiatives in our industry in absentia of the core players in the industry.

IPD Botswana Annual Property Consultative IndexResults for the year to 31 December 2012

The IPD Botswana Annual Property Consultative Index measures ungeared total returns to directly held standing property investments from one open market valuation to the next and in 2012 returned 17.9%

IPD Botswana Annual Property Consultative IndexTotal return

%Income return

%Capital return

%12 months 12 months 12 months

All Property 17.9 11.0 6.3

Retail 16.6 10.6 5.5

Office 15.2 11.7 3.2

Industrial 28.4 12.5 14.3

Residential 24.4 8.8 14.4

Other* - - -

*No results published for confidentiality reasons.

Comparative DataEquities 7.7 - -

Bonds 6.3 - -

Inflation 7.4 - -

Data sources: BSE All Share, BSE Bond Index, CSO Botswana CPI National

IPD Botswana Annual Property Consultative Index database profileCapital value

BWP (m)Capital value

%Number of properties Number of funds

All Property 2,850.2 100.0 103 7

Retail 1,463.0 51.3 18 5

Office 661.7 23.2 21 7

Industrial 279.4 9.8 26 4

Residential 157.9 5.5 27 4

Other 288.3 10.1 11 2

The figures above represent the full coverage of the IPD Botswana Annual Property database as at December 2012. The IPD Botswana Annual Property Consultative Index employs only fully revalued assets from that database.

gabanaarchitects


Gabana Architects was formed in 2009 by Mr Moemedi Gabana, a Chartered Architect with Royal Institute of British Architects (RIBA). Gabana is a graduate of Oxford School of Architecture, one of the leading schools of architecture in the world, based in Oxford, United Kingdom.

Gabana Architects offers services including Architectural designs, Project management, Urban design with special emphasis on Mixed Use development, planning applications and negotiations with council, Interior design, Brief formulation, Facilities management, Landscaping and Master planning. The company has already made its mark by entering major design completions for Water Utilities Head Quarters and Botswana innovation HUB.

The firm is based on the ethos of cutting edge design approach where the word “impossible” doesn’t exist during the design process, site analysis and evaluation. We leave no stone unturned in the search for ideas and finding the client solution. We are not afraid to ask the client to draw as part of the solution finding process!!The client is totally involved in the search for the design solution no matter how big or small the project is. Our ideas emerge from the intersection of many active minds and imaginations.

Gabana Architects stall at the Property Expo 2013

gabanaarchitects


gabanaarchitects


IPD Botswana Annual Property Consultative IndexResults for the year to 31 December 2012

The IPD Botswana Annual Property Consultative Index measures ungeared total returns to directly held standing property investments from one open market valuation to the next and in 2012 returned 17.9%

IPD Botswana Annual Property Consultative IndexTotal return

%Income return

%Capital return

%12 months 12 months 12 months

All Property 17.9 11.0 6.3

Retail 16.6 10.6 5.5

Office 15.2 11.7 3.2

Industrial 28.4 12.5 14.3

Residential 24.4 8.8 14.4

Other* - - -

*No results published for confidentiality reasons.

Comparative DataEquities 7.7 - -

Bonds 6.3 - -

Inflation 7.4 - -

Data sources: BSE All Share, BSE Bond Index, CSO Botswana CPI National

IPD Botswana Annual Property Consultative Index database profileCapital value

BWP (m)Capital value

%Number of properties Number of funds

All Property 2,850.2 100.0 103 7

Retail 1,463.0 51.3 18 5

Office 661.7 23.2 21 7

Industrial 279.4 9.8 26 4

Residential 157.9 5.5 27 4

Other 288.3 10.1 11 2

The figures above represent the full coverage of the IPD Botswana Annual Property database as at December 2012. The IPD Botswana Annual Property Consultative Index employs only fully revalued assets from that database.


BREAKFAST FORUM SPECIAL: Event ProgrammePage 19

On behalf of BOIDUS MEDIA, a great THANK YOU to all of our sponsors:

Tiny joined BIFM as Chief Executive Officer in August 2010 with a wealth of experience in the pensions and asset management industry. Tiny has over 20 years of experience in the financial services industry with knowledge ac-quired while working at Standard Chartered Bank, Barclays Bank and most recently Debswana Pension Fund, where she was at the helm of the organization for four years.

BOTSWANA’S INNOVATION AMBITIONSMr. Alan Boshwaen [CEO, Botswana Innovation Hub]

Mr. Alan Phemelo Boshwaen is the founding Chief Ex-ecutive Officer (CEO) of the Botswana Innovation Hub (BIH) since June 2011. Prior to his current position he was the founding CEO of the Botswana International Financial Services Centre (IFSC) which he pioneered in 2003. Mr Boshwaen in the past held a range of senior management and executive positions in the private sector banking and mining industry.

THE PROPERTY MARKET & BOTSWANA ECONOMYDr. Keith Jefferis [Director of Econsult]

Keith Jefferis is a macroeconomist and financial sec-tor specialist, who is Managing Director of Econsult Botswana (Pty) Ltd, and is a former Deputy Governor of the Bank of Botswana. His current activities include work on a range of macroeconomic, financial and oth-er development issues in Botswana and elsewhere in sub-Saharan Africa. He is accredited to the IMF Techni-cal Assistance Experts Register.

HOUSING AND PROPERTY INVESTMENT - BHCMr Reginald Motswaiso [CEO, BHC]

Mr. Reginald Motswaiso is the Chief Executive Officer of the Botswana Housing Corporation (BHC). Reginald joined the BHC from Standard Chartered Bank, Bo-tswana, first as a Finance Director. He went on to be-come the Executive Director responsible for Finance, IT, Human Resources and the Turn Around Strategy. Regi-nald is a Fellow Chartered Certified Accountant (FCCA) and a Chartered Management Accountant (ACMA).

FUTURE PLANS FOR SPECIAL ECONOMIC ZONESMr Letsebe Sejoe [Acting CEO, BITC]

Letsebe is the Acting Chief Executive Officer at the Bo-tswana Investment & Trade Centre (BITC), Botswana’s new national investment promotion agency (IPA). Prior to this role he served as the Acting Chief Executive Officer of the former IFSC Company and served as a Business Support Services Manager at Standard Chartered Bank Botswana. He is a Director on BoFiNet Board of Directors and is Chairman of the Finance & Audit Board Committee.

THE RELOCATION OF DTC TO GABORONEPaul Rowley [De Beers]

Mr. Rowley is the Senior VP of Midstream Operations at De Beers based in Gaborone, Botswana. Prior to this, Paul acted as Managing Director of DTC Botswana, where he was responsible for the sorting and valuing of Debswana’s diamond production. In this capacity, Paul was a member of the DTC Executive Committee in London and served on the boards of DTC Botswana and Namibia DTC.

UNPACKING THE IPD BOTSWANA INDEX 2012Stan Garrun [Executive Director of IPD, South Africa]

Stan Garrun is Executive Director of IPD in South Africa, which became a subsidiary of IPD Holding UK in 2002 and now part of MSCI Inc. Stan is responsible for the development of the IPD business and services in South Africa. Stan holds a B.Com. degree. He has been a se-nior manager at the Argus media group, a director at Group 5/Everite, Strategic Services manager for SAPOA and CEO of SAPIX, the predecessor to IPD in SA.

BOTSWANA’S LISTED PROPERTY ENTITIESTurnie Morolong [Property Director, PrimeTime]

Turnie is the property director of Time Projects (Bo-tswana) (Pty) Limited, and has been with the company for the last 7 years. He was previously employed by a major Botswana private corporation as a group prop-erty administrator and has over 15 years’ experience in property management.

BOTSWANA’S INSTITUTIONAL INVESTORSMr Victor Senye [Chairperson for BITC and BTO]

Mr Victor Senye is the Managing Director of Haighs Investments (Pty) Ltd where he is responsible for prop-erty development and investment services. Previous to this Mr Senye was the CEO of Bifm, during which time Bifm experienced remarkable growth in profits and as-sets. He is currently the Chairperson of the Botswana Investment and Trade Centre (BITC) and Botswana Tourism Organisation (BTO).

PACKAGING & STRUCTURING YOUR INVESTMENTMartin Mongameli Hoko [MD, Premierwealth]

Martin Hoko has been the Managing Director of Pre-mierwealth since 2005, where he directs the overall strategy for Premierwealth, with particular emphasis on raising the financial literacy levels of professionals and business owners. Mr Hoko is also a full member of the Institute of Marketing Management, member of the Financial Planning Institute, and a registered Financial Life Planner, and a Certified Financial Planner.

BUYING, PROCURING & MANAGING PROPERTYMaje Maje [REIB]

Maje Maje is the co founder of Apex Properties. He is an expert in valuation and advisory services. He is the current president of the Real Estate Institute of Bo-tswana (REIB) and a board member of the Real Estate Advisory Council (REAC).

WELCOME REMARKS AND EVENT OPENINGMs Tiny Kgatlwane [CEO, BIFM]

BOTSWANA PROPERTY MARKET

BREAKFAST FORUMPRESENTERS AT THE EVENT AND TOPICS OF DISCUSSION

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BREAKFAST FORUM SPECIAL: Event in PhotosPage 20

BOTSWANA PROPERTY MARKET BREAKFAST FORUM

24th September 2013 at GICC

BREAKFAST SEMINAR PRESENTERS [clockwise from top left]: Reginald Motswaiso (BHC CEO), Keith Jefferis (Econsult), Pauly Rowley (De Beers), Tumie Morolong (Primetime), Stan Garrun (IPD South Africa), Martin Hoko (Premierwealth), Lonely Mogara (BITC), Victor Senye (Chairperson for BITC and BTO), Maje Maje (REIB), David Tsheboeng (BIH)

Documents

Boidus Focus - Vol 3, Issue 7 [Oct 2013]