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A view from the top

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This week Khumo Property Asset Manage- ment will be celebrating ten years of exis- tence and business operations within the property asset management sphere.

Compared to property management, which focuses on managing the actual building such as the tenants and leases and repairs and maintenance, property asset man- agement is about creating and managing the wealth related to the property or a portfolio of properties on behalf of clients.

Asset managers have a clearer view of the property dynamics and advise clients on how best to increase the value of their property portfolios through assessment of the type of tenants to occupy the property; performance of the prop- erty, if it is profitable or not and whether the client should ‘acquire, hold or dispose’. A good return, exploiting the value of the property and reducing the risk to the client is the ultimate goal of the property asset manager.

At times they may recom- mend that a client ‘change their land use’ to position themselves to better optimise on the location they occupy for example changes may be caused by the direction of growth of the town or city. The CEO of Khumo Property Asset Management, Outule Bale, has been with the company since 2007 and is at the helm of an organisation that now manages properties or assets worth over P2 billion through a staff compliment that is now 100 percent Botswana citizens. These range from commercial, retail, hotel and residential properties.

Bale observes that most of the past ten years the Botswana property market has been buoyant. “In the last two years there has been a bit of a slowdown. We have also seen an oversupply in the ‘commercial’ market,” he adds. The commercial market he refers to are the office properties which seem to have sprung up almost overnight in areas such as the Fairgrounds, Finance Park and the new Gaborone CBD. The asset man- ager is confident that when the economy improves the property market will also improve.

Similarly, retail property development has been phenomenal in the last 10 years. Shopping Malls for example Riverwalk and Game City where developed during the years 2001 and 2002. In the last six years Rail Park Mall, Airport Junction, Sebele Mall, Northgate were opened. The CEO advises that, “Investment decisions in these and other property sectors should be preceded by careful analysis of the environment and other important factors that influence viabilities and feasibilities.”

Bale also points out that development has not only been limited to the commercial sector, that other property sectors have also seen significant progress. For instance, lately there has been notice- able development activity in the hotel sector. “Some of the sectors should now be reaching equilibrium, where demand equals supply,” observes Bale.

“Without any major new economic activities, there will be possibilities of recycling of tenants. Tenants will vacate and relocate to newer properties that offer modern amenities and are at the same time competitive in prices.” Bale explains that for the older properties to survive this pending risk they need to ‘reinvent’ and ‘relive’ themselves. This is one of the roles that Khumo plays on behalf of clients through its development arm.

Khumo Prop- erty Asset Management has over the last ten years participated in property developments all geared at optimising value and wealth for clients.

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‘Manufacturing holds key to economic growth’

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Barclays bank’s economist Naledi Madala has urged the country to consider manufacturing, as a key tailwind to drive the economy and reduce inequality.

She was speaking at a gathering organised by the bank which focused on economic outlook for 2019. “We should not make a mistake of leapfrogging without manufacturing,” said Madala, lamenting that the country’s diversification remains a pipeline dream, as the diamond is still the economy’s mainstay. She bemoaned that mining activities in the country could not spring forward diversification, though non-mining GDP has been steady over the years.

“Extractive industries are not good stepping stones for diversification, the sector does not prepare us for the next step,” said Madala at the Barclays’ Economic Outlook Forum Review 2019. The economist further noted that government should confront head-on challenges of productivity and competitiveness to attract the much needed Foreign Direct Investment (FDI). Though diversification efforts continue to hit a brick wall, Madala said the country should expect increased activities in the mining sector hinged to ramp up in coal production in the year ahead.

She also implored government to consider a welcoming attitude towards foreign investors and generous tax incentives to businesses that set up in the country. Madala is also upbeat that the use of public private partnership model could also help diversify the economy coupled with privitisation. “Privitisation will offer opportunities for growth, through the renewed optimism from government, as business confidence has improved,” said Madala.

She implored the government and the business community to access what is going to drive and hinder growth highlighting that key headwinds to growth are income inequality, diversification challenge and productivity, among others. “The pace of poverty reduction has slowed down, while income inequality goes up,” said Madala

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MINISTER BEWAILS BAD REPAYMENT BY YOUTH

Keikantse Lesemela

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Minister of Youth Empowerment, Sports and Culture Development, Tshekedi Khama has told parliament his ministry continues to face challenges on the repayment of Youth Development Fund (YDF) loans.

Recently presenting the budget to Parliament, Khama said this financial year the ministry has received a total of 2582 YDF applications and approved 983of them to the value of P98 million. He said the programme attracts a high level of interest from youth but the ministry is only limited to funding a maximum of 1200 youth projects annually due to budget limitations.

“However the greatest challenge for the Fund is the repayment of the loan component by the majority of the youth businesses. The youth have advanced number of challenges for this including high rentals for operating spaces, low market access owing to tight competition and limited production capacities,” said Tshekedi, adding that they continue to pursue beneficiaries to repay the loans.

Out of the 919 businesses funded 1058 jobs have been created. The minister highlighted that disbursements of funds will continue to be undertaken until the end of the financial year. “The YDF is currently under review in line with the pronouncement made by the President, Dr Mokgweetsi Masisi in the State of the Nation Address, to improve beneficiaries through training, and encourage consortia and cooperatives,” said Tshekedi.

The ministry assists YDF beneficiaries in marketing their products and services through fairs and exhibitions. The ministry also runs entrepreneurship-training seminars for youth and in the past year 3692 young people were trained. Over 600 youth businesses attended fairs and exhibitions to market their products and services. Currently the ministry is collaborating with Local Enterprise Authority (LEA), First National Bank Botswana and Citizen Entrepreneurial Development Agency (CEDA) on training in entrepreneurship development and mentorship of YDF beneficiaries.

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