PHAKALANE: Simply Unique

In a wide-ranging interview with Business Leaders, the Managing Director of Phakalane Estates spells out what the up-market suburb is made of. If George Sim was to see what his former farm has turned into over the last few years, he would regret why he tried farming in a semiarid region instead of developing a commercial, industrial residential estate.

The farm has metamorphosised into a unique residential leafy suburb of Phakalane, where the "who is who" of Botswana have either taken residence or invested in property. Although it took the Magang family a couple of decades to realise their dream, the wagon finally got on to the rail in 1988. It was not easy for the farm to be approved for township development. This was due to unwarranted bureaucracy in government and the disbelief that anyone from the local community could come up with such an idea and make it a reality. Those were the days when Foreign Direct Investment (FDI) was the most acceptable form of injection into the economy at the expense of Local Direct Investment (LDI). No one would think that a black Motswana would come up with such an idea influenced by the likes of Sandton in South Africa.

The picture of township development was as clear as daylight from day one;' said the managing director of Phakalane Estates, Lesang Magang. He added that they almost relinquished the idea of development of the township for small holdings due to limitations in funding for drawings and redrawings of business plans and though our conscience as promoters kept hovering that "this was not the original idea':

Magang says, "We believed in whatever Phakalane is today. That is why we have adopted a new branding philosophy that 'Phakalane is simply unique'. Phakalane is now a reality that no one can run away from:'

Phakalane has significantly contributed to the economy of Botswana and no one can doubt that. This has happened in terms of empowering Batswana to own freehold property in a valuable area that appreciates tremendously. The upmarket suburb of Phakalane has generated a lot of business and given returns to those who have bought property in the area.
Property in the past 15 years has grown by over 600%. A property that was developed some five years ago in Phakalane has appreciated so much that it has more than tripled in value. Banks in Botswana have also made brisk business out of the suburb as they have gone beyond the P3 billion mark in terms of mortgage value of properties.

Currently, Phakalane can boast of accommodating top officials in both government and the private sector such as ministers, the chief justice and permanent secretaries as well as chief executives of most dynamic companies in Botswana.

From its inception in the year 2000 the property value in Phakalane Golf Estate went up by 60% over the first two years, a competitive return on investment of 30% per annum in comparison to other forms of investment. This is contrary to the views of Knight Frank which carried out a valuation at the time and said, "We would anticipate a reasonable demand for the estate development in Phakalane': The Golf Estate Resort has broken the record and a grand ambitious sale of P5 million for a house has been achieved. The Estate has been able to house the retired President Festus Mogae.

"In world trends, you have to be a dollar millionaire to stay in a Golf Estate but Phakalane offers this life for much less. This is the kind of value we are creating for Botswana here in Phakalane;' Magang enthused. There are plans to launch a Millionaire's Drive in the Golf Estate - nearer to where the retired president stays. The plots in the street will cost P1 million.
Phakalane intends to attract the foreign and local jet-set community who will want to buy the last 10 plots with Golf Course views across the 14th par 4 Fairway, and along the 4th, 5th, 10th and 11th Fairways. Magang stressed that Botswana is to be branded as the investment destination of choice in Africa, the way Dubai is in the Middle East and as the Palm Jumeirah and Palm Jebel Ali, the Palm Islands which is named the 8th Wonder of the World is the destination of choice in Dubai, Phakalane is the premier investment destination of choice in Botswana.
It is meant to trigger human emotion and that is exactly what it is doing. He said like in Dubai where the Sheiks have created a centre of excellence that was seen as the armpit of the world 25 years ago, at the centre of Europe and Africa and the Far East, Botswana in Sub Sahara and the Southern African countries has been creating the momentum for investment and growth. For every discerning investor in the country to own property, Phakalane has been the inspiration and this has also triggered the value over the years.

He added that he was encouraged by the fact that there is going to be diamond cutting and polishing in Botswana and most of the diamond dealers are coming to set up shop in the country. This will later be followed by the jewellery industry.

Magang says the property boom that has been witnessed in South Africa because of the
2010 World Cup should spread into Botswana. His conviction is that any ordinary person who wishes to own property in a valuable place can afford to be in Phakalane given that some plots are sold on monthly instalment terms at a value equivalent to what people are buying a modest car. This therefore can be afforded by anyone who wishes for a trendy, lifestyle.
Phakalane is soon going to introduce lifestyle apartments for the younger generation of professionals who are seeking a trendy lifestyle for themselves. "One can be staying in a one or two bedroom apartment but with an apartment in Phakalane you can leverage this in a few years time to buy a stand alone house as you can use the capital growth'; he said He admitted that the moving in of the retired president Festus Mogae into the suburb has done wonders for their marketing drive as most aspiring people are making enquiries for plots neighbouring his. And this is what he calls investing for capital growth because in about fives years the property will have greatly appreciated in value. Golf Estates are well known for providing very secure upmarket residential properties and recreational complimentary facilities for its residents. Phakalane Golf Estate vision is to be among the top 20 Golf estates in Africa and top 50 Golf estates in the world. Apart from the existing chalets and Villas that offer accommodation a further 72 luxury hotel rooms with a Spa will be developed this year. Magang's wish is that that Botswana should become the Dubai or Switzerland of Africa by attracting the wealthiest people and this will bring about the much-needed diversification of the economy. This will also make Batswana associate with big players in the world's economy and start thinking like them. For this to truly happen we need enacting of a citizen Empowerment Act. The bottom line should be that if you need to do business with Government and its institutions there must be significant citizen shareholding. This is a regional trend and not a fashion so it might take the next 5-10 years for us as a country to adopt this.

The MD is a complete covert of the fact that Botswana is another Dubai. Botswana's business community must be assisted by legislation for Batswana to have a truly meaningful stake in the economy. Batswana in big business cannot wait to evolve but must be created. In that way, FDI and LDI will grow Botswana's middle class further and allow Government to focus in the lower income and those who live below the poverty datum line.

11 Nov 2009

Business Leaders April/May 2009