Maiden property index for Botswana

Brian Benza
Staff Writer | Wednesday November 14, 2012 00:00

 

Yesterday's launch of the Property Performance Report 2011 makes Botswana the second African country to join the IPD's stable of property research, provided in 32 countries around the world. The first African report was for South Africa, launched in the mid-1990s.

Speaking at the launch of the Botswana report, research director at IPD South Africa, Jess Cleland said that Botswana's index stood at 20.9 percent for the year ending December 2011. The index is a performance indicator of investment property market in a country.

Cleland said the index shows that Botswana is a highly lucrative property market, second only to Hong Kong among the 32 countries that IPD covers. 'The 20.9 percent return on Botswana property is comprised of a 10.8 percent income return, coupled with a 9.2 percent capital growth throughout the year. Retail and residential property investments outperformed offices, reflecting the impact of recent development activity in the office sector and the resulting pressure on rental levels in the short to medium term as new supply comes online,' said Cleland.

The IPD Botswana Property Performance Report is based on a sample of 81 individual properties with a total value of nearly P2 billion. The figures represent the combined holdings of six leading Botswana property investment portfolios. These include Botswana Insurance Fund Management Property Portfolio, Debswana Pension Fund, Letlole La Rona Limited, Motor Vehicle Accident Fund, Primetime Property Holdings Limited, and Turnstar Holdings Limited.

Giving a keynote address at the launch, Lands and Housing Minister, Lebonaamang Mokalake welcomed the introduction of the index, which he said will provide professional opinion on the property sector and information to guide investors. 'The index will provide better comparison by local and foreign investors of property performance with that of other asset classes such as equities or bonds. Most importantly, doubts and uncertainty in the important area of property valuations will be a thing of the past,' said the minister.  

The report is a result of collaboration between IPD South Africa and founding sponsor Botswana Insurance Fund Management (BIFM) and Real Estate Institute of Botswana (REIB). 'Players in both local and global property markets increasingly expect comparative, accurate and timely data. Offering an objective performance report is a real competitive advantage to a fund, and assists companies to improve their investment and management processes through the availability of credible data and research. The information over time helps investors and managers to take a disciplined approach to asset and portfolio risk management and can facilitate cost reduction and increased efficiency of properties,' said IPD South Africa managing director, Stan Garrun.

IPD benchmarking and portfolio analysis services in the 32 countries it covers incorporate more than 1,500 funds, containing nearly 70,000 assets, with a total capital value over one trillion Euros. Each year, IPD produces more than 120 indices helping real estate market transparency, performance comparisons and  nearly 600 benchmarks for client portfolios.