Boidus Focus - Vol 2, Issue 9 [Nov 2012] by Boidus Botswana

14.11.2012

OIDUS FOCUS

Registered at GPO as a Newspaper Volume 2, Issue #9

NEWS >

EDITORIALS >

FINANCING >

02 State of Construction Poorly Addressed [President’s State of the Nation Address]

04 Plain talk by JOWA; Gaborone CBD - A Planning Story

07 Feature Interview: BBS Bank On Funding Commercial Property In Botswana

04 Boidus Feature; Building a Central Business District during a recession

03 Buildings of the Year 2012: The RIBA Architecture Awards

Botswana’s Architecture Design & Urban Landscape Newspaper

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BOIDUS EXCLUSIVE >

BOIDUS FEATURE >

10 Quick Guide To Investing In Commercial Property

P8.00 (Including VAT)

5 Reasons Why Gaborone Central Business District Will Fail. by H. Killion Mokwete

Cor-ten Screen Wrapping envelope wooden finish

From-Congo-Belgium-Suriname-SA-To-Molapo Crossing The Journey of Architect Luc Vandecasteele

by Kibo Ngowi

Today, Luc Vandecasteele is best known for being the director and a part owner of Molapo Crossing but it was a long journey that brought him to where he is today. Born in the Democratic Republic of Congo – then known as Belgian Congo – in 1956, Luc Vandecasteele was the son of the governor of a province in the colonial

administration so when the country gained independence in 1960, his family was forced to flee to their native country of Belgium. Becoming an Architect Remarkably, Vandecasteele says that he made the decision to become an >>> CONTINUED PAGES 04/06

IPD launches first report of property investment performance in Botswana by Boidus Admin

Gaborone, 13th November 2012: Investment Property Databank (IPD) released its first-ever Botswana property performance report in Gaborone today.

mance Report for the year to December 2011 produced a total return of 20.9%. This figure represents the ungeared total return to directly held standing property investments from one open market valuation to the next.

The IPD Botswana Property Perfor-

>>> CONTINUED PAGE 02

In 1989 when the origins of the Central Business District (CBD) were being laid out, it was envisaged that the CBD was ‘designated to become the new heart of Gaborone, the preeminent business, cultural and recreational district of the city’. Twenty years later, the same could not be said about the prospects of the current CBD unfolding. It is neither the centre nor does it look like it will become the ‘Heart of Gaborone’ that was originally intended. We explore some of the key reasons why such a promising dream will eventually not reach its intended goals.

1 2 3 4 5

18TH CENTURY CBD IN 21ST CENTURY ECONOMY. A radical approach needed for 21st century to redefine what a CDB is.

FAILURE IN INFRASTRUCTURE DEVELOPMENT. Skewed development phasing and lack of pragmatism.

CBD DEVELOPED TOO LITTLE TO LATE. Prime developments have already been taken elsewhere across the city.

VOLATILE ECONOMY. Recession in full swing and land owners have odds stacked against them.

FAILURE TO CREATE NEW IDENTITY FOR THE CITY. To date not a single development has any traceable elements of our culture and national symbols. >>> CONTINUED PAGES 08/09

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Local News Page 2

BOIDUS FOCUS Wednesday 14 November, 2012

Contractors To Be Adversely Hit By Water Restrictions

LOCAL NEWS FEATURE

State of Construction Poorly Addressed by Kibo Ngowi

In the recent State of the Nation Address, President Khama had little to say about the construction industry. He emphasised that government has had to take strong action against contractors who have failed to deliver projects on time and according to specification, making reference to the termination of the two contracts on the Sir Seretse Khama International Airport project and the National Stadium project. He also mentioned that the Claims Audit had saved the government P135.6 million, as well as an increase in performance standards witnessed since the introduction of quality auditors in a speech that was generally geared towards applying more scrutiny on contractors. Boidus Focus measured the industry reaction towards the Address’ treatment of construction in Botswana through the perspectives of two industry representatives.

by Kibo Ngowi

a single contractor who has received written permission to use portable water but that he would poll the members of the organisation on the matter.

New City on the Cards

by Kibo Ngowi

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Markos Markides, Chairperson of the construction sector for BOCCIM says that the main issue he is disappointed was not addressed is the ‘unbundling’ of mega projects, an initiative that his organisation has been pushing for government to begin. This is a process whereby instead of having huge multi-million pula projects, government cuts them down in to smaller projects allowing citizen contractors an opportunity to tender because the huge projects that typically characterise Botswana’s construction industry are simply out of the reach of 100000 most Batswana contractors. “We don’t want to put the blame on the government’s doorstep because we know the government has competing priorities left and right” says Markides “What we are saying is ‘try and spread the load with the little that government has.’ That’s the main message.”

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“These restrictions are going to kill off what little construction is left in the country” said Executive Director of the Association of Botswana Building and Civil Engineering Contractors (ABCON) Nic Van Rensburg, in an interview with Boidus. Rensburg laments that his association is powerless to do anything itself and that it can only alert the government to the effects their decisions have on contractors which the government may choose to disregard. He went on to say that he personally does not know

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For his part, President of Tshipidi Badiri Builders Association (TBBA) Chris Gofhamodimo says that the danger of imposing restrictions on the use of portable water on construction sites is that clean water is a necessity for the mixing of concrete as well as the drinking, cooking and sanitation needs of workers. He did mention that for the sake of conserving water, there are some activities for which contractors could use water from rivers or recycled water but warned that a blanket restriction on the use of portable water could have a detrimental effect on the construction industry.

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The Ministry of Minerals, Energy and Water Resources, has recently introduced new water restrictions, amongst which include a ban on the use of portable water on construction sites without written permission from the Water Utilities Corporation (WUC).

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Markides is also very concerned about what he describes as “the unfortunate and shocking comments that the construction industry is booming.” He says that the comments do not reflect the reality on the ground as he can cite the names of hundreds of people who have been retrenched from different departments and companies that have had to shrink their operations or close shop entirely as well as signs that point to a great deal of apathy and disillusionment amongst industry professionals. “What we would like to say to the whole of Botswana is that the construcPhakalane tion industry has basically collapsed” says Markides Glen“Unfortunately, Vallley the State of the Nation Address did not capture this situation. We’re not saying that government should run to the rescue. We’re saying it’s Broadhurst Ext. 60,71-72 not helpful for government to be making these comThe agenda of the meeting included a ments because it shows that officials are out of touch.” presentation on the key development challenges of the project and a video Executive Director of the Association of Botswana on the development of a special ecoBuilding and Civil Engineering Contractors (ABCON) nomic region in the Eastern European Nic Van Rensburg is perturbed about the fact that only country of Georgia from which the Game Reserve a fraction of the P1.8 billion budget that government department hoped the stakeholders announced for the construction industry has actually would draw important lessons. DTRP benefitted the industry. While industry players were is in the process of developing a deelated at the announcement of the figure, they soon sign competition to get a diversity of TT LL O OK KW WE EN NG G found out that P600 million of that was ‘non-existent’ ideas on the detailing of the land expected to hold 60,000 plots. SS

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On the 30th of October DTRP held a stakeholder’s meeting at the Tlotlo Hotel and Conference Centre to discuss the development of the area that has been dubbed ‘the new city.’

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The Department of Town and Regional Planning (DTRP) has initiated M O G O D I T S H A M O G O D I T S Hplans AN NE E to expand Gaborone on to a 5000ha Greenfield site in the area Block 5 surrounding Sir Seretse Khama International Airport.

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because it was carried over from the previous year. Of the P1.2billion remaining, the actual budget given to the Ministry of Infrastructure Science and Technology (MIST) was P400 million. It’s now November 2012 and MIST has only spent P100 million. This situation is only being exacerbated by the ineptitude of the Central Statistics Office (CSO) who, through questionable practices, have calculated a 45% growth in the construction industry in the first two quarters of the financial year. When Rensburg questioned the CSO on the growth figure, they said that they only use the information they have so if a company does not put in a return because it doesn’t exist anymore, the CSO, having not been notified that the company has been closed down, use the last information that they have for that company as if it is still in operation. In the case of PPC Cement for instance, the information in use dates as far back as 2008. Meanwhile, only one company put in a return this year and they say in their first quarter, the company grew by 22% and in the second quarter by 25% so that’s now the growth for the industry. “So Government is sitting with a set of statistics that says there is growth in the industry while we are crying that we are dying!” says Rensburg. Rensburg also questions how the Claims Audits saved the government P135.6 million saying that he knows for a fact that about 40% of the overruns in money and time are caused by bad planning, bad designs and continuous changes during project implementation. “So who’s to blame for that?” asks Rensburg “Because what we do as contractors is we get a set of plans and we work according to the plans. If we hit a snag, the consultant must sort out the problem. It’s not our problem.” However, the proverbial nail in the coffin for the construction industry has been government’s decision to divert funds to decreasing the budget deficit. The State of the Nation Address read in part that government will have an estimated P1.5billion of budget surpluses this financial year following a reduction of budget deficits from a high of 9.5 billion in 2009/10 to an estimated P2.2 billion in 2011/12. “So what they are doing now is they are channelling all the money into reducing the deficit” says Rensburg “So even though the budget is there the money is actually not there.” Rensburg says that he and other construction industry representatives proposed a stimulus package to government as far back as last year but that it has received no response to this day. “We proposed a stimulus package for the construction industry and people called it a bail out. What we proposed to government was ‘you spend the money that you said you were going to spend in the budget. That’s what we want, nothing more. And we will ensure that we boost EDD projects, poverty eradication projects, all those drives that government has, we as an industry will push them if we have the money available.’ Unfortunately, it was passed on to MIST where nothing is happening.”

BOIDUS FOCUS Wednesday 14 November, 2012

Local / International News Page 3

With Problems Behind, BIH in Full stretch towards the Development of its Core Building Facilities. by Boidus Admin

Now housed in a new home at the former BOTEC, Maranyane House, away from the BDC house, the BIH has put its troubled past behind to focus on taking on the next challenges of its development. BDC had earlier been taken to court by Davis Langdon over procurement irregularities and BDC had been instructed for Davis Langdon to be installed into the technical team. BIH has since taken over control of the projects delivery;with a full project management team headed my Mr David Tsheboeng. On Friday 12th, the next phase of the project, the development of the Botswana Innovation Hub Science and Technology Park was officially launched by the Vice President Dr PH Kedikilwe. Giving welcome remarks to the invite only crowd, the Minister of Infrastructure and Technology said the Park is seen as key to Botswana’s efforts to diversify its economy into areas of research, innovation and knowledge based enterprises. Giving the Keynote address, Vice President Dr PH Kedikilwe outlined that the BIH initiative was set up as a special purpose vehicle(SPV) to help accelerate Botswana’s vision 2016 goals especially the Economic Diversification Drive efforts. He said the BIH had a mandate to operate and oversee all integrated initiatives of science and technological research and innovation. He said research outputs would

be commercialised to provide products and services towards a knowledge based economy. Key areas that will form a core focus of BIH initiatives are Biotechnology, Energy research initiatives and clean technology, Environment and green initiatives and mining research products. He indicated that BIH will be implemented in phases. External and civil works (completed), Development of Core buildings designed by internationally acclaimed ShOP architects from USA and last phase will be construction, expected to commence in 2013. The architects could however not make it to the event due to the recent devastating hurricane sandy that tore through the east cost of USA including New York City.

INTERNTIONAL NEWS GBCSA Convention and Exhibition 2012

The Green Building Council of South Africa (GBCSA) Convention and Exhibition which took place at the CTICC from 23 - 25 October 2012, offered an invaluable platform for over 80 businesses, involved in sustainability, who showcased their services, products and green innovations. The event sponsored by Nedbank Corporate Property Finance, saw the launch of the latest Green Star Tool for Public & Education Buildings, the announcement of the Green Star Leadership Awards winners and the signing of the 49M pledge being amongst the activities that took place over the three days. Experts from the United States, Australia, England and the Netherlands joined local green leaders to facilitate two days of keynote speeches, panel discussions, debates, and break-away sessions.

GREEN RATING TOOL LAUNCHED The Green Building Council of South Africa (GBCSA) officially launched the Green Star SA Public and Education Building version 1 rating tool at its yearly convention in Cape Town on 24th October 2012. The tool would be used to assess and assign a Green Star SA rating based on the environmental merits of new or significantly refurbished public and education building developments. It consists of eight environmental-impact categories for assessment and one innovation category with ratings possible at the design phase (design rating), as well as post-construction phase (as built). Buildings to be assessed would fall under the classifications of entertainment and public assembly, theatrical and indoor sport, places of instruction, places of worship, exhibition buildings and museums. Thus, the tool would include community buildings, libraries, schools and tertiary education facilities, courts and public transport terminals, among others.

Buildings of the Year 2012: The RIBA Architecture Awards Source: ribastirlingprize.architecture.com RIBA STIRLING PRIZE 2012 The Sainsbury Laboratory, a major new plant science research centre in Cambridge by architects Stanton Williams, has won the coveted RIBA Stirling Prize 2012 for the best building of the year. Now in its 17th year, the RIBA Stirling Prize is the UK’s most prestigious architecture prize, awarded to the architects of the best new European building built or designed in the UK. This is the first time that Stanton Williams has won or been shortlisted for the RIBA Stirling Prize. With the Sainsbury Laboratory they have achieved worldclass architecture for world-class science. Set within the University of Cambridge Botanic Gardens the low-rise, collonaded stone and glass building is carefully designed to complement its Grade II listed garden setting. The architects have created an

exceptionally stimulating work environment, reinterpreting the tradition of the monastic cloister and collegiate court to create spaces for reflection, debate and collaboration amongst scientists. Next to the laboratory spaces, the architects have designed a stylish new public garden café. THE LUBETKIN PRIZE Guangzhou International Finance Centre in China by Wilkinson Eyre Architects, the tallest building in the world by a UK architect, won the RIBA Lubetkin Prize for the most outstanding work of international architecture outside the EU by a member of the RIBA. RIBA MANSER MEDAL Maison L, a highly innovative house on the outskirts of Paris, by architectures possibles won the RIBA Manser Medal for the best newly designed private house.

Giving a vote of thanks, the CEO of the BIH Mr Alan Boswaen outlined that BIH was now a fully fledged company with fully operational government structures, headed by Board Chairmen Mr Neo Moroka. He said BIH is a holding company while BIH Properties will be in charge of developing the land and managing joint ventures for other land developers who would buy land. Mr Boswaen illustrated BIH vision encompassing the following areas: • Mining Technology • Bio Technology • Clean Technology. • ICT

The Sainsbury Laboratory by Stanton Williams

Guangzhou International Finance Centre, China by Wilkinson Eyre Architects

Maison L, Paris by architectures possibles

Feature Page 4

BOIDUS FOCUS Wednesday 14 November, 2012

From-Congo-Belgium-Suriname-SA-To-Molapo Crossing The Journey of Architect Luc Vandecasteele

by Kibo Ngowi

>>> FROM PAGE 01

architect at age six: “When I was six I decided I was gonna be an architect and that I definitely wasn’t gonna stay in Belgium. People say ‘How could you know that at six?’ but when I was in my first year of primary, I decided ‘I will be an architect and I will leave Belgium.’ I obviously didn’t know where I would end up but I knew that was what I wanted to do.” Vandecasteele would realise his dream when at the age of 17 he began studying architecture at a University in the historic city of Ghent in the Flemish region of Belgium but the experience was not to be what he expected. He recalls that his biggest problem when he started studying architecture was that he had previously been a brilliant math student so he tended to see the world in terms of set formulae but architecture

demanded an entirely different conception of reality. “At the end of day one, my head was spinning,” he says “The lecturers had this attitude that they were going to teach us to swim by throwing us into the pool and they didn’t care who drowned. It was up to us to keep ourselves afloat.” The class started with 96 students and at the end of three months there were 32. Luc was amongst the 32: “That’s one thing about me – when it gets difficult, that’s when I start to grind.” The transition from a math orientation which was based on formulae to being thrown into the world of architecture based on creativity was hard. “After a year I had learned to forget about my math and just do what I think is right, to look at problems differently and to raise questions. I think that has helped

me because they completely broke me down so that I could learn a new way of doing things; by the end of the first year I knew what architecture was about.” Vandecasteele also says that studying to be an architect in a historical city added something special to the experience: “The nice thing about studying architecture in a historic city or in Europe was that after sitting for three four years in a classroom being shown all these slides of buildings you’re supposed to see, you actually get in your car and you go and see them.” Upon graduating, Vandecasteele faced the prospect of a year in military service which was compulsory for Belgian citizens at the time. He took the alternative option of working for the Belgian government in a developing country for three years on a very low salary .The service had to be unpaid and earning more than an allowance to survive was not allowed. He chose to go to the South American nation of Suriname, formerly known as Dutch Guyana. At the age of 23, a time when most people today are just starting to try and find their feet in the working world, Vandecasteele found himself appointed to a position in which he had 500 employees working for him and was responsible for all government-funded construction projects in an entire country. “Mostly because nobody wanted to work for the government at the salary I was getting, I ended up in a very high position with a lot of responsibility” says Vandecasteele “I was basically in charge of everything that

was built in the country. I don’t know how I survived it but the stress was unbelievable because the corruption was endemic.” During his time there, he oversaw the building of hundreds of schools but admits the bulk of the planning and coordination was done by consultants. His department developed a standardised design template that they would use for all the schools; this brought the cost of building down and increased efficiency.

stupid. At 25 I still thought I was gonna change the world single-handedly.”

Two and a half years into the job, he decided to blow the lid on the hotbed of corruption that was Suriname’s construction industry by approaching his Minister with falsified cheques bearing the names and signatures of top senior officials. Upon hearing what the young man in his office had to say, the Minister promptly put the documents away in his drawer and told Vandecasteele that the following day he would have to stand in front of a military tribunal for accusing top of-

He soon got himself commissions to build in the townships and had to get permission from his employer to bring some of his clients to the office. One client wanted to build a retail centre in Mamolodi and the employer arranged a QS to explain to the client how to raise the funds. The client got inpatient during the meeting and simply turned his briefcase upside down and about 5 million rand rolled out! No need for finance, my first “under privileged “client had the cash.

Once back in Belgium and having to deal with the endless grey days, he decided to go back to his roots, Africa. Being a rebel, he chose to alter apartheid in SA and worked from Pretoria. He eventually got his employer to allow him to teach in the townships and taught a lot of influential “under privileged “ people.

At the age of 23, a time when most people today are just starting to try and find their feet in the working world, Vandecasteele found himself appointed to a position in which he had 500 employees working for him and was responsible for all government-funded construction projects in an entire country. ficials of corruption without evidence. That night, Vandecasteele hopped on a plane, abandoned everything he had and fled the country, never to look back. It was the second time in his life that he found himself having to leave a country for his own safety. Recalling the decision to approach the Minister that led to him being forced out of Suriname, he says “I was young and

After several years building retail centres a Botswana office made him an offer. He immigrated to Botswana and one of the earliest projects he did was designing a school through the Boipelego scheme in Mahalapye. The government went ahead and used those >>> CONTINUED PAGE 06

PLAIN TALK BY JOWA

CBD - A Planning Story by Jan Wareus, Architect / Town Planner With great frustration I agreed to the editor to write “the history of planning the CBD area” – I agreed but as far as I can see it’s more of a “story” than history. Anyhow, arriving here in January 1979 with the main duty to come up with a “Structure Plan” for Gaborone West following the predecessors complete failure to do so. I had to dive into a deep pool from a high trampoline. The week after my arrival, YS promised the action group at the ministry a plan. There was no time for a 1 month study of Setswana and Traditional Living for me. Instead I learnt a lot about the modern Tswana living at my hotel – old President. So it goes, said Kurt Vonnegut, once! In these days, there was an Urban Development Committee, chaired by a very tough and professional ministry representative, whose name I have totally forgotten. All utilities and BHC were in the committee as well as MoF and other essential authorities. This took me by surprise as even in Stockholm (where I worked with different extension areas larger than Gaborone by then) we didn’t have such a useful committee, action concentrated and to the point. Naturally, this effective GoB organ was by time killed and “normal bureaucrazy” prevailed, soon again. Well I’m mentioning this as I believe that we

here in Botswana can be effective and productive if the conditions are right. I do not think it is creative to blame public servants for being low in productivity. No person wants to be low. But the conditions for productivity must be condusive and housing, salaries and working conditions must be right for a start. Knowing very well that only one out of ten travellers on the Lobatse-Francistown Road was passing Gaborone without stopping, the major feeder road was named – the Bypass, despite the fact that its function was to disperse urban traffic. This seems to be a semantic thing but it is more than that – the road came under the rule of Roads Department and should have been a GCC object – very much to the detriment of later developments. The second thing is the CBD area as it is now called - this story is a bit longer but bear with me. It is great fun to knock it down! In late 79 – early 80, the academics at UB were quite useful for us planners. A socio-economic pundit made an analysis of the existing commercial areas. Mostly small centres then in the middle of environmental units as well as the school. About 4-5 shops (a small general dealer, bar/bottle store, butcher and one/two hairdressers - normally). The conclusion was clear – this doesn’t work economically for the investors/owners. Apart

for a few located close to feeder roads (they are still surviving), most of them could hardly be categorised as “sustainable”. Consequently, the concept for Gaborone West was amended. Four environmental units had to share a local centre, which is obvious when you look at todays maps. A bit longer, but not too much, to walk for the inhabitants and we found it acceptable. But, the clever consultant also pointed out the necessity of a “regional centre” or sub-centre, about the size of the Broadhurst one, planned (but not constructed) by then. Consequently, we looked for a similar place, somewhat central, in Gaborone West. We could only find what is today called Molapo Crossing. But, there were difficulties with this location – floodplain, bad clays soils. Simultaneously, we had a problem with what is now called the CBD area. We wanted it for downtown urban housing, embassies (in short supply, then), offices and some expansion area for the planned bus terminal (the area indicated south of the over-flight was already then understood to be too small in the long run). Problem one was the noise pollution of the (then) frequently used railway movements. The problems we had with “Molapo Crossing site” were all of a sudden solved by a persistent and single minded ministry engineer. “We move it next to the railway”, he instructed. But then we must dig down the railway, the clever

Mr Irgens, Chief Roads Engineer, in a jabbed. Nonsense, the ministry engineer countered – we allow no housing! And we make it a CBD area like they have many in Los Angeles! So, thanks to this clever engineer, we now have a Bypass and a CBD area, both named by him. No much planning, in my opinion, just personal views by an influential engineer. The problems with the competition with the existing Mall were obvious to us planners. The traffic specialists were upset as the then planned road structure would not be capable of serving a new town centre/CBD. And so it is today. Apart from the fact that by 1980/81 the rule was that no buildings could be so high that they overlooked the State House (security measures). How that rule was forgotten, I don’t know but it is, definitely. In fact, the first three-storey buildings in the Govt Enclave from the mid ‘80s kept to this rule but the “fangs” in the enclave (Min of Education and Min of Immigration) made a change (to the worse). Having no height restriction is in my opinion the first mistake when trying to keep an environmental wholeness and beauty in the urban landscape. And this is an experience from many towns and cities all over the world. We know now that buildings in need of a battery of lifts are very vulnerable – both to power cuts and terrorist attacks. Not to talk about the immense power that goes to keep them warm and cool.

BOIDUS FOCUS Wednesday 14 November, 2012

Markets Page 5

IPD launches first report of property investment performance in Botswana by Boidus Admin

holdings of six leading local property investment portfolios: 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. The report is the result of many months of collaboration between IPD and key partners in Botswana, namely: founding sponsor Botswana Insurance Fund Management (BIFM) and industry association Real Estate Institute of Botswana (REIB). “The critical factor in an undertaking of this magnitude is finding the right partners, especially in the property sector where local context and knowledge is paramount,” says IPD SA managing director Stan Garrun.

>>> FROM PAGE 01

This return on Botswana property is comprised of a 10.8% income return, coupled with 9.2% capital growth throughout the year. Headline inflation in Botswana over the same period, however, was also 9.2% - meaning that growth in nominal terms was in fact stable, and highlights the importance of income yields in the property market. 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.

The report presents a fully-fledged indicator of results that will provide effective comparisons for market trends going forward, and is a significant step forward in the promotion of transparency in the Botswana property industry.

IPD is the leading global provider of real estate benchmarking services and Botswana is only the second Af-

rican country to join the stable of property research provided in more than 30 countries around the world. The first African report was for South Africa, launched in the mid-nineties. BIFM, founded in 1975, is a whollyowned subsidiary of Botswana Insurance Holdings Limited (BIHL), one of the top listed companies in Botswana. SA-based Sanlam holds a 54% stake in BIHL, with the balance owned by the Botswana public. The fund today controls a P15-million portfolio of investments. “With its roots firmly planted in Africa, and its experience in providing innovative solutions for dynamic wealth management in emerging markets, BIFM is committed to sharing its expertise and experience with stakeholders in other African countries, especially those whose economies are undergoing similar transformations to Botswana,” says BIFM CEO Tiny Kgatlwane. The report is expected to

pave a way forward for the opening of Botswana’s property investment sector to a range of new buyers, and provides an important tool for local players. “Players in both local and global property markets increasingly expect comparative, accurate and timely data” adds Garrun. “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.” “Importantly this is a historical event for the Botswana property market and the local investment community. IPD is privileged to be part of it.” Garrun concludes.

Keynote speaker at the launch is the Hon. Mr. Lebonaamang Mokalake, Minister of Lands & Housing, underscoring the Botswana government’s support of the initiative. The IPD Botswana Property Performance Report is based on a sample of 81 individual properties with a total value of just under P2 billion. The figures represent the combined

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Feature Page 6

BOIDUS FOCUS Wednesday 14 November, 2012

From-Congo-Belgium-Suriname-SA-To-Molapo Crossing The Journey of Architect Luc Vandecasteele

by Kibo Ngowi

>>> FROM PAGE 04

same plans to build hundreds more schools across the country without his knowledge and without crediting him. “I felt abused by Boipelego because I wanted to get fees for every school they built with my plans but I realised that as an architect, when a thing is good and they build it a hundred times, consider it an honour; don’t say I have to be paid a hundred times.” He recalls that he only realised that the government was using his plans to build more schools when he was called to explain why the wall of a school in Jwaneng that was built using the same plans had fallen. When he went to find out what had happened, he found that the steel frames of the building contracted and expanded in the desert climate of Jwaneng in which the temperature would be 30 degrees during the day and 5 degrees at night, causing the wall to become looser until it fell. Fortunately, no one was injured. “The problem was that they had taken the plan I had made for a school somewhere in Mahalapye and just used the same thing for a school in Jwaneng because they simply didn’t understand why plans had to be designed to suit the particular environment in which the school would be built.” Lobatse high Court Another one of Vandecasteele’s earliest jobs was the High Court Building in Lobatse. The experience would prove to be one of the most trying of his career. In around 1983 he was asked to build the High Court and at that time the Chief Justice was a Ghanaian man. “He was a very humble man” recalls Vandecasteele “He wasn’t a Motswana so he was very soft-spoken because he knew they could replace him at anytime.” So, Vandecasteele

took him to the Bophuthatswana High Court, a project he had been involved in, which was a very large homeland building with a monument. The Ghanaian Chief Justice saw the building and said that he didn’t want anything grand because “the High Court is just a place where cases that have already been handled at the Magistrate court are handled only when there has been a mistake.” Vandecasteele did what he wanted and started to build something modest but he eventually found it necessary to write a letter to the Chief Justice saying the building was too small. “It caused an uproar” says Vandecasteele “because Mmapula Johnson and Festus Mogae (Minister of Finance and Development Planning at the time) got involved and I was accused of blowing the project out of proportion so I could earn more money.” Three weeks into construction the Chief Justice died and was replaced with the first Motswana Chief Justice in the country’s history. His vision of how the High Court should look was completely different because he felt that the place should be a grand spectacle. The budget was more than tripled from P2million to P7million. Vandecasteele knocked down everything he had done thus far but three or four metres off the ground, the second Chief Justice died. In a bizarre turn of events, Vandecasteele found himself answering to a third different client during the course of the same project and this Chief Justice said he wanted to make it smaller. The result of this was that the project ultimately turned out to be a confused mess. “I remember when the official opening came there was an article in the Daily News about how useless the architect

was because he tripled the budget” recalls Vandecasteele “I then went to Mmapula Johnson and said I was going to pull out my version to defend myself but she just pulled out my contract and showed me where it said I couldn’t say anything. So I swallowed my pride and shut up.” Molapo Crossing The genesis of Molapo Crossing first came about when Pick n’ Pay approached Vandecasteele to build a shopping mall in which a branch of their chain could be the anchor tenant. The local manager of a Score, which is part of the Pick n’ Pay conglomerate, identified the piece of land on which Molapo now sits as the ideal place for them to open the first branch of Pick n’ Pay in the country. At the time, the Western bypass had just been built and there was virtually nothing on one side so Vandecasteele set his sights on acquiring the plot. Three or four years went by before he met the person who was given the land, became a shareholder in his company – Busy Five Enterprises – and then approached the government to build a shopping mall. Busy Five Enterprises acquired the rights to build but they were allowed to only build commercial property on one third of the land because the land had been zoned civic and community with a view to building the first private hospital. “There have been accusations made that that land was specially made for me” says Vandecasteele “but the truth is that the land was set out to be used for the first private hospital. But BDC (Botswana Development Corporation) who were the driving force behind the project decided that they would rather go to Broadhurst.” Vandecasteele says he prides himself on having developed a mall unlike any other in the city. “I tried to make a shopping centre which wasn’t like the other ones. I’m proud to say that I’ve refused every blue chip tenant a space and I have given preference to

local traders, apart from the anchor tenant which the bank requires to approve financing. I had a deal with CEDA; I think about nine traders were CEDA funded when we first opened and honestly I got myself into all kinds of trouble because most of them didn’t survive because it was their first business and they didn’t know how to run it properly. I’ve learned from all those mistakes but Molapo is still today a convenience shopping centre which is not suffering from competition from any other big shopping centre. People don’t come to Molapo to spend the day. They come because the need milk, a box of matches, and something else. They are there for a purpose because it’s convenient.”

The perforated roller shutters are closed during summer and serve to keep all sun off the windows. They allow anyone in the house to see outside. The total open plan of the house made it possible to de-

sign a house without one set of corridors. Although the house feels big, it is only 120 sqm in size. The thermal performance of the house is simple and the idea has been used for thousands of years in dry hot climates in the middle-east. I was first confronted with such houses while in Algeria. They were always in mud and used very thick walls of say one metre thick. They would keep the house well within the twenties when the outside temperature in the sun was exceeding sixty degrees! The Botswana traditional hut had some of the qualities of the middle-east housing, but all were lost when the average Motswana decided to adopt western building practices. The thermal performances of a servant’s quarter built out of hollow

“I take it to the level where we’ve already managed to raise financing and the architect just has to deliver the project. It’s a whole commercial enterprise that architects are not trained upon. The architect is the man that has to have the dream because without the dream nothing happens but how do you now sell that dream to a financier who sits everyday in an airconditioned office with his tie on?” Vandecasteele sees himself as the go-

‘...People don’t come to Molapo to spend the day. They come because the need milk, a box of matches, and something else. They are there for a purpose because it’s convenient...’ An Advisory Role However, Vandecasteele isn’t too concerned with the business side of things nowadays. After more than three decades in the business and achieving success in his own right, the architect, real estate-agent and entrepreneur now has his heart set on filling an advisory role for his fellow professionals. “I have moved from being an architect to being someone who, if I had it my way, would close all my businesses and go and help my fellow architects. Because, with respect to them, I see most of my colleagues battling to get their buildings built because they don’t know how to raise finance from a bank and all the other things that go into getting a project built.” Vandecasteele moved from being an architect to being an estate agent but he ended up being forced to open an arm of his company called ‘Concepts’ because his clients wanted him to draw up the plans for the land they would develop on because they already trusted him. Vandecasteele says that he helps people to find the right

THE HOUSE: Phakalane

It is built on top of the land and used the cut and fill to take soil away from it in the front and put it on top of the roof. The concrete walls and roof are reinforced and waterproofed. The roof has a screen on top of the water proofing membrane and a further metre of soil. The mass of the soil and the concrete are used to delay the heat of the day till the night and vice versa. The cool freshness of the night is stored and released during the day. The effect on the house is that it remains cool in summer and warm in winter. The house performs exceptionally well.

land, then develops a concept and hands it over to the architects to take it further. He does this so that at least his client can be confident that he has the right land, the right location and the right planning.

blocks and a thin sheet metal roof are well known but Western building practices remain the preferred building method of the average Motswana. It is orientated NNW or 10 degrees West of North. That orientation is better than straight North as we want to catch some of the hottest afternoon sun, particularly in winter. On the west side we use plants to cover the west facing windows. The concrete and soil are capable of storing the heat and release it with a delay of approximately 8 hours. The coolness of the night is released during the day and the heat of the day is released during the night. The house has proven that the building method is viable and cost effective. Replacing the concrete with mud and making the walls even thicker will improve the performance even further.

between and that is the role he says he would like to play on a ‘freelance’ basis. “I have so far been successful for myself. I would like to do that for somebody who feels they have a great idea but they don’t know how to go about making it work.” He says that the biggest obstacle he faces in pursuing this ambition is that he doesn’t have the trust of his fellow architects. “They look at me with some mistrust because I’ve been successful so they suspect as soon as they tell me their plans, I’m going to run away and implement them myself. I don’t want to do that. I don’t have a big office behind me. I just want to do what I’m good at. So please get the message out that I’m wanting to meet all these architects. Please come out of the woodwork and give me a chance. Allow me to say ‘Yes! This will work’ or ‘this will not work.’ If I have to shatter some dreams in the process, so be it. Hopefully, I can make some dreams come true. But that’s really what I would love to do.”

BOIDUS FOCUS Wednesday 14 November, 2012

MOLAPO 2

Buildings Page 7

FEATURE INTERVIEW - FUNDING COMMERCIAL PROPERTY IN BOTSWANA

BBS- Property Finance Expert Oarabile S. Basupi

BF: Please tell us what is the difference between a Commercial Loan Mortgage and a Residential Loan Mortgage? What are the financial aspects of a commercial property that are looked at while assessing for eligibility?

Management is progressing with the design of the approved extensions for Molapo Crossing. The development will ensure that Molapo diversifies services offered at the extension. The gym, which will be the largest in the country at a size of 2,200m2, will be extended to include a half size Olympic indoor swimming pool as well as saunas and Turkish baths. The event arena is taking shape and many interested parties have contacted management. Management is talking to various parties, all having their own ideas on how best to use the events arena, so we hereby invite suggestions from all parties as the arena will be available for all kinds of performances. The planned clinic will have adequate space for 6 doctors and will be linked with the gym. Several new restaurants have contacted us and we are discussing exciting proposals with those restaurants that are known to be involved in event organization. We are in the process of moving away from a pure retail/office experience to include services as diverse as a clinic, a theatre and a gym as well as a small entertainment area for the children. That area will have fountains, a water mirror and even a dedicated pool for their specific requirements. Malls are fast becoming the mausoleums of the future and he who proceeds with the construction thereof does so at his own peril. That is our advice to anyone considering venturing into that line of developments. The city, like the rest of the world, is experiencing a fast shift away from malls. Shopping is becoming a dreary compulsory task. It has to be done to get food on the table, but most of us hate it. Those that love it, and there are still shopaholics, find themselves struggling to convince the rest of the family to join them. The children are the first to get bored with shopping so they drag their parents to those malls that have some entertainment. Getting the husband to do anything other than pay for the shopping expedition is even more difficult! He too demands that the mall offers him entertainment. The event must be a social event or it will disappear. Molapo 2 will be an event mall. It will ensure that regular events will attract the masses and such events will need to be diversified. We have huge demand for the arena and requests are varied from religious gatherings to political rallies to pop concerts and farmer’s markets. Besides the water mirror we will also provide the tourists with a “history wall” that depicts the history of Botswana on a number of fixed walls at the entrance to the piazza. It is hoped that the wall, depicting 50 frames on our history, becomes a focal point for tourists and schools alike. We have sought the assistance of the Diamond industry on telling the diamond history on the wall as well.

OA: Commercial loans differ from Residential loan mortgages as the name suggest, that is residential loans are for domestic buildings while commercial loans are usually larger in size and lending amounts. Commercial loans are offered to companies or commercial entities. Also the factors, influencing assessment of commercial loans involve much more that those of residential loans. They encompass other aspects such as economic, social and global issues. Assessment of commercial loans is usually centred on the viability of the entity being financed. Some of the key assessment involves evaluation of the following: • Financial statements of the commercial project • Forecasted performance of the projects /future Projects • Project Cash flows • Over and above, different financiers will consider varying objective aspects such as the economy, government policies, social issues, global business trending and the companies’ directors’ profiles. BF: Can you tell us what is used to determine the Market Value of a commercial property and if this is different from residential. What percentage of the Market Value does BBS finance? OA: Market Value of commercial projects is determined by certified Valuers and Market Surveyors. In commercial properties, over and above the physical space attributes, viability of the business is reviewed in determining Market Value. BBS has a list of preferred Valuers and Surveyors, which should be confirmed with the bank as it is amended periodically. BBS generally finances up to 90% of the Open Market Value but each financier has different rates on project per project basis. Deposit is also required and the rate differs as per project. Obviously the more one put deposit as a show of commitment the better. BF: What are the payment terms? OA: Normally BBS finances commercial loans up to 20years payment plan. Although commercial loans are applicable to companies, assessment of the director’s age is considered, including the succession plans for the company. This would mean that for example if one is 60 years old and are looking for a commercial loan to be paid back in 20years, then there has to clear succession plan that will assure the bank of the long term plans of

the company. BF: What is the current commercial property environment in Botswana? What is the current estimate value, in Pula terms of the Botswana commercial property market and are we likely to see an increase or decrease in these figures? OA: Unfortunately, we do not have current estimate values of the Botswana commercial property market, however, we anticipate an increase in the commercial property market. According to the NDP 10, “a shortage of serviced industrial land has been identified as a major investment constraint in Botswana.” In an effort to remedy the situation and ensure speedy allocation of land to investors, about 270,000 hectares of land as well as eight concession areas were reserved for the Ministries of Trade and Industry, Environment, Wildlife and Tourism as well as Agriculture. The Government is in the process of attaining 5 570 hectares of Tribal Land for incorporation into Gaborone. The aforementioned policies will inevitably lead to the increase in the commercial property market. BF: Experts and economists have recently warned of commercial property sector over saturation, what is your take on this? OA: Commercial property has been seen to grow and in fact some might say is in a boom especially in Gaborone. If you look at the activity in office developments, commercial malls, hotel developments you will can see that there is a definitely a lot of activity. The only question is the long term sustainability of the boom. There is an overriding question as to whether there is bound to be a crash as markets stabilizes due to mobility of people from previously occupied places such as Commerce Park, Kgale Mews and others to the new CBD and finance park. BF: What are the key challenges of funding commercial properties in Botswana? OA: The key challenge is financing the ‘business person’ in Botswana rather than business itself. Reputation of the business person especially is still a big risk, especially because many aspiring business individuals still fail to seek necessary professional assistance to effectively run and manage their business. This makes it difficult in assessing the acumen of the person behind the business to be invested in. Perhaps financing institutions need to actively engage in educating the public about financial matters and their importance in business. BBS will continue to participate in education platforms to inform the public and consumers about some of these key issues as discussed here.

Boidus Feature Page 8

BOIDUS FOCUS Wednesday 14 November, 2012

5 Reasons Why Gaborone Central Business District Will Fail. by H. Killion Mokwete >>> FROM PAGE 01

18TH CENTURY CBD IN 21ST CENTURY ECONOMY. The CBD developed as the market square in ancient cities. On market days, farmers, merchants and consumers would gather in the centre of the city to exchange, buy, and sell goods. This ancient market is the forerunner to the CBD. Since the first appearance of a typical Central Business District (CBD) in London, at the Exchange (near St Paul’s Cathedral) in the early 1600’s, the CBD has always been somehow associated with good economic climate and prosperity in business. As cities grew and developed, CBDs became fixed locations where retail and commerce took place. The CBD is typically at or near the oldest part of the city and is often near a major transportation route that provided the site for the city’s location, such as a river, railroad, or highway. Gaborone’s CBD however, originally developed ‘to become the new heart of Gaborone’ in the 1990’s, never developed organically centred on a business and trading boom. Developed on a previous former disused ‘Cotton Farm’, it was always going to rely on business relocating to it and this guaranteed high odds against it as we will see. The Gaborone CBD was never developed out of measurable economic, thriving trade and or exchange. Although the national economy was at the time at its highest, and the country in he middle of its diamond boom (…. Stats CSO), the same could not be said about the private business sector at the time. Twenty years later with the CBD in full implementation, the world economy and especially business environment has changed radically form the traditional model of the trade based on a fixed

CBD. Whereas in the 1960’s the CBD was focused on financial institutions and offices, 21st century has its own agendas that needs a radical approach from the old conception of what a CDB is. Today’s business is dictated by:

According to a Report by KPMG, ( The Cloud, Changing the Business Ecosystem), The Cloud also enables organizations to build virtual and “open” business processes, enabling its various stakeholders including customers, business partners, suppliers, etc. to connect and do business more seamlessly.

•

Digital connectivity (Virtual Office Space)- Companies are increasingly working from a single server connection and accessing their data base material through new connectivity such as the Cloud. There is increasingly less need for blocks and acres of office space.

Globalization / Multinational corporations only need one focal point as headquarters for all their global cooperation. Debswana’s relocation to an industrial area, abandoning key city buildings, Orapa House and Debswana House in main Mall is a key example.

FAILURE IN INFRASTRUCTURE DEVELOPMENT. The delay to implement key critical infrastructure such as critical road connections, street lights public realm, public transport hub and pedestrian facilities even to date will prove critical to the success of the CBD. On the plan, key constraints to this site were identified by a Engineering Study Report in 1992 at the onset were: • Nyerere Drive Extension and Molepoloe Road flyovers which blocks access from north and south • National rail line which blocks access from the east, cutting the CBD access to the City Centre. • Flyovers to the east and south of the site It was recommended in the development objectives of the CBD Masterplan, that resolving access and connectivity to CBD was therefore to be made a key objective. This was to be achieved through proposed access points from Khama Crescent and access from Independence Avenue. This was stated as one of the keys to success of the envisaged CBD. The construction of these was so essential that they were planned as also a phasing part of the CBD growth. In fact these access connections were envisaged as key to the phasing development of the site which was planned to start from the south increasing to the north.

‘The CBD should not be an island. It should be effortlessly connected for pedestrians and motorists, between the existing mall, Government Enclave, train and bus terminals, and adjustment neighbourhoods’. SKEWED DEVELOPMENT PHASING AND LACK OF PRAGMATISM The CBD masterplan emphasized pragmatism in its development implementation, with a phasing plan tied to the nations NDP plans over a period of twenty years. It stated that: The CDB masterplan envisioned a ‘phasing strategy that will allow the CBD to grow incrementally, through three phases and over 20 years:

PHASE

PERIOD

NDP PERIOD

Phase I

1995-2003

(NDP VII and VIII)

Phase II

2004-2009

(NDP IX)

Phase III

2010-2015

(NDP X)

The plan accommodated that individual developments be allowed to be influenced by their own development viability

‘Each individual proposal will develop to a time scale which enhances its own objectives, but which may not relate to the implementation schedule envisioned in the plan. It is therefore suggested that the Gaborone CBD Masterplan be implemented with a degree of flexibility rather than following a rigid, yearly increments. ‘ Envisaged to be implemented from the south of the CBD and in phasing, the logic seemed clear that the south has the largest block of land, Block 2, measuring 100 000sqm and zoned for commercial and retail activities including the only originally approved petrol station. This was envisaged to act as stimulator and anchor to the CBD. This area of the site would easily be interlinked to the transport hub and through economies of scale infrastructure and services would easily be tapped from existing across the road. The current implementation has instead turned this logic upside down. Phasing from the anchor was abandoned in favour of a far smaller area at Block 15, where Sqaure Mart was developed. The area is too small for a fully fledged anchor and to make up for space, the Square building was then allowed to break the masterplan rules that the building on the edge of the site be developed not more than 3-4 storeys. Also incremental phasing was abandoned wholesome and development across the site enforced through directive. The original pragmatism has since been replaced by a directive requiring all plots in the new Central Business District (CBD) to

be developed within two years of land award. Commenting on this approach, Stephen Wyatt, and then Director at Knight Frank was quoted as saying, “In practice, it cannot possibly work. If everyone started construction as they should, the market will crash,” he warned (Mmegi). The directive, long issued is freckles in nature without any clear concreteness. Its enforcement is used occasionally to threaten landowners, with repossessions. Lately, the new Minster, L. Mokalake, has been quoted issuing threats to repossess while on the other hand, saying; ‘…But, of course, we are dealing with people here and generally you find that they may not finish within that period. If we see eagerness to develop, we grant extensions…”We understand that the developers do not control all the factors, but we are also not saying ‘just go and sit down and we’ll extend’. Asked about the threat to repossess, Mr Benedict Mabeo, a land owner and developer at the CBD points out that if the current landowners where moved aside, who in Botswana would afford or have access to funds to develop this grade A area? He gives an example of Block 2, 21st century made up of the top tier of Botswana’s wealthy, permanent secretaries, former presidents and others. This is an area requiring at least P40 million to develop the base minimum required. >>> CONTINUED PAGE 13

BOIDUS FOCUS Classifieds WELCOME

DIARY/EVENTS/ACTIVITIES

BOIDUS FOCUS CLASSIFIEDS

Aucor Property 2012

Date: Thu 22 November 2012 @ 12:00 PM Venue: The Hyatt Hotel, 191 Oxford Street, Rosebank

Global Expo 2012

Botswana Conference & Exhibition Centre, Fairgrounds The country’s premier international business to business exhibition which is multisectoral in focus.

TENDERS JOBS EVENTS

Jobs | Tenders | Events | November 2012

TENDERS / JOBS INVITATION TO TENDER TENDER NO: NBFIRA 09/2012 TENDER FOR PROVISION OF SPACE DESIGN AND PROJECT MANAGEMENT SERVICES FOR NON-BANK FINANCIAL INSTITUTIONS REGULATORY AUTHORITY (NBFIRA) Tenders are invited from reputable companies/firms for provision of space design and project management services for Non-Bank Financial Institutions Regulatory Authority. Tender Documents: Tender documents can be collected from NBFIRA Office 1st floor MVAF Building, Lot 50367, Fairgrounds, Gaborone, starting from 5th November 2012 upon payment of tender documentation and administration fee of P200.00. The payment should be made to:

Bank: Stanbic Bank Branch: Fairgrounds Branch: Code: 064967 Account no: 0140020210100 Swift code: SBICBWCX

The tender documents will only be issued on presentation of a valid proof of payment.

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Tenders must be 1 original and 4 identical copies in plain sealed envelopes, clearly marked:

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TENDER NO: NBFIRA 09/2012 PROVISION OF SPACE DESIGN AND PROJECT MANAGEMENT SERVICES FOR NON-BANK FINANCIAL INSTITUTIONS REGULATORY AUTHORITY Tender Committee Secretary NBFIRA 1st floor MVAF Building Lot 50367 Fairgrounds Gaborone

Closing Date: Tenders must be hand delivered to the above address no later than 12:00 hours on 23rd November 2012, being the closing date. Tender Opening: Tenders received by closing date and time indicated above shall be opened at 12:00 hours or immediately afterwards at the NBFIRA Board Room on 23rd November 2012, in the presence of Tenderers wishing to attend. Tenders received after the above mentioned date and time will not be considered. Furthermore, telephonic, telex, facsimile or electronic mail submissions will also not be considered. Notwithstanding anything contained in the foregoing, NBFIRA is not bound to accept the lowest of highest tender. The Authority reserves the right neither to proceed with the tender nor to give reasons for its decision. The Authority reserves the right to award in full or part of the tender to one or more Tenderers. The Authority shall not be responsible for any expenses incurred by the Tenderers in the preparation of the proposals. Enquiries: any further information relating to this tender should be directed to the Tender Committee Secretary who may be contacted on 3102595 or email procurement@nbfira.org.bw

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BOIDUS FOCUS Classifieds Commercial Properties | November 2012

BUY OR RENT OFFICE SPACE - HERE’S HOW TO DECIDE

by Joseph Anthony / Source: microsoft.com Sooner or later, every business has to for you now can look attractive. But what consider whether it is better off owning will you do if your business and your or leasing office space. From law firms to space requirement grow over the next retailers to yoga studios, the decision var- few years? ies. But here are some elements that most small businesses take into account. Outgrowing a space doesn’t have to be a financial crisis. One wholesaler I know THE CASH OUTLAY FACTOR: saw his business increase so much in five Generally, you don’t need to put out as years that he needed more than twice the much money upfront when you lease as space of the building he’d purchased. He you do when you buy. A quick example: was able to lease out the building at a A real-estate agent is looking to sell a profit, and moved his own business into a $500,000 commercial property. Some- new, larger space. one leasing the space might pay around $4,000 monthly in rent. Someone look- Still, growing out of a place you own can ing to buy the building would have to put involve more upheaval than growing out about $150,000 down, and also would of a leased space. Sometimes a growing have had to pay for an appraisal, building business can avoid the cost and hassle inspections, loan fees, and other costs. of moving by simply leasing more space in the building it occupies. That’s not an THE FIXED/VARIABLE COST FACTOR: option when you own a building unless Buy a building and you have a good idea you’re only occupying part of it and can of what your costs are going to be year af- terminate the lease of another tenant. ter year, especially if you get a fixed-rate loan on the property. Lease and you’re THE APPRECIATION FACTOR: subject to the vagaries of the market when Buying a building puts you in a second your lease term expires. Many leases also business: real estate investing. If you’re in have a clause allowing for an annual cost an area of appreciating land values, evenincrease tied to changes in the Consumer tually you could sell it at a profit. But if you Price Index or some other measure. own a building with more space than your business needs, you’ll probably end up THE GROWTH FACTOR: renting to others, thus becoming a landBuying a building that’s just the right size lord. It can all be profitable (or a financial

drain in a down market), but what it is sure to be either way is more work than simply leasing space. THE TAX FACTOR: As usual, there are tax issues to consider. Businesses routinely can deduct the full amount they pay in rent. Owners of rental property can write off repairs immediately, but improvements to commercial real estate have to be deducted over 39 years. Depreciation on commercial buildings also is taken over 39 years. That means that if you buy a commercial property for $250,000 and the land is valued at $60,000, you can write off only slightly less than $5,000 of the purchase price annually, regardless of the size of your down payment. You also can deduct interest on the purchase loan, property taxes and other qualifying expenses. Attorneys may recommend placing commercial property inside an entity such as a limited liability company (LLC), with the LLC then leasing space to other businesses including your own. The reasons for, and logistics of, doing this are too complex to explore fully in this column. The best advice I can give you is to consult with your attorney and tax professional about the legal and financial considerations of owning investment property.

GETTING MORE HELP In general, leasing tends to appeal to businesspeople who don’t want to make the kind of large upfront investment required with a purchase, who aren’t really sure how much space they’ll ultimately need and who simply don’t want to have to deal with the responsibilities of owning a piece of commercial property. Buying is going to make more sense for businesspeople who are more established, who want to be in one location for several years and who have the financial resources to take on a significant real estate investment. Some of the basics of comparing leasing to buying (trying to predict future price appreciation, considering cash-flow issues and factoring in the cost of a down payment on something you own versus rental payments that don’t build any equity, for example) are similar to issues involved in deciding whether to lease or buy a house. Disclaimer: Boidus Media does not provide commercial property adversary services. Information given here is for reference purposes only. Boidus Media nor its advertisers will not be liable for any miss-application of information contained here.

QUICK GUIDE TO INVESTING IN COMMERCIAL PROPERTY 1. What are the advantages in investing in commercial property over residential? 2. To rent or to buy: what’s your advice for someone looking for office space, should they rent or buy? a. How can one decide which is best office building to invest in or rent? 3. Which area currently in Gaborone is the best to invest in office space and why? (Kgale Mews, CBD and Fairground) 4. What average rentals could one expect to pay in standard office in CBD? 5. What will be a key to attaining the optimum rentals for spaces in CBD? OFFICE SPACE: WEIGHING THE PROS & CONS All growing small businesses may someday be faced with the question of leasing versus buying office space. This question has many pros and cons. In order to make your decision-making easier, we have assembled the key facts of leasing versus buying office space. With the cyclical property market, office vacancy rates and stock markets, it is uncertain what the future may bring. A small business owner needs to carefully weigh the pros and cons of leasing or buying office space.

OFFICES READY TO LET Central Business District

BUYING

LEASING

Benefits

• Fixed Costs: Locking in your commercial mortgage long-term can give your business clear, fixed costs. • Tax Deductions: The associated costs of owning and running a commercial space can provide expense deductions in the form of mortgage interest, property taxes and other items. • Additional Income: Owning your office can offer the advantage of renting out extra office space, adding another source of income. • Retirement Fund: The prospect of owning commercial space and having the property appreciate over time, allows the owner to sell out and fund their retirement.

Disadvantages

• Lack of Flexibility: A new or growing business may experience unexpected needs in the future. If your business continues growing, your owned office space may become inadequate forcing a sale of the property. • Upfront Costs: Buying commercial space will initially cost far more upfront. There are property and maintenance costs along with a large down payment and possible property improvement costs.

• Prime Property: A leased office space provides a business with the chance to rent in an area with a good location and high image. If your small business is dependent on location and image, such as retail or restaurants, the leasing option is much more affordable. • Free-up Working Capital: With your money not tied up in real estate your business can respond to opportunities in the market. In addition, your ability to borrow funds will not be as limited as with buying office space. • More Time: Any type of ownership comes with headaches. A leasing option affords the time to focus solely on running your business.

Disadvantages

• Variable Costs: With a leasing option you may be subject to annual rent increases and higher costs at the time when your lease expires. • No Equity: While leasing you will be funding someone else’s retirement with your lease payments. However, owning requires you to get involved in the property management business.

BOIDUS FOCUS Classifieds PROPERTY SHOWCASE

MARUPING REAL ESTATE

Property Valuers, Managers & Estate Agents P.O. Box 5083, Gaborone Ext. 2, African Mall, Lot 871/2/3/4 Babereki House, Suite 2F PROPERTY FOR SALE

Phakalane

Tel: 3902552 Fax: 3911605 Email: marupinginfo@gmail.com

Property Listings | November 2012

PROPERTY FOR SALE & RENT

MARUPING REAL ESTATE

Property Valuers, Managers & Estate Agents P.O. Box 5083, Gaborone Ext. 2, African Mall, Lot 871/2/3/4 Babereki House, Suite 2F

Tel: 3902552 Fax: 3911605 Email: marupinginfo@gmail.com

P1,500,000

PROPERTY FOR SALE

Phakalane

P1,800,000 Neg

PROPERTY DESCRIPTION

This cozy home has excellent finishes and is a great architectural design. The property offers the main bedroom, with walk in cupboards and full en-suite bathroom. A three bedroomed home with lounge, guest toilet, garage, kitchen with stunning finishes. The property has a landscaped garden, swimming pool, boundary wall, excellent security with electrical fencing. Plot size 648 sqm.

PROPERTY FOR SALE

Block 3

P700,000

PROPERTY DESCRIPTION

This 450m2 home consists of 2 bedrooms, lounge, open plan kitchen and bathroom. The house is walled, with remote control gate and electric fence.

PROPERTY DESCRIPTION

Lovely Family home in a Phakalane with established garden and abundant space. Main Residence: 3 Bedrooms, 2 bathrooms. Main bedroom is larger than normal, fitted kitchen, lounge, carport, Lounge, Electric Gate, Electric Fence all around, paved and walled. Main House: alarm system. Plot size 630sqm.

PROPERTY FOR SALE

Extension 12

P1,450,000

PROPERTY DESCRIPTION

RESIDENTIAL OUTPERFORMS OFFICE AND RETAIL

Located at extension 12 is a stand being improved by a small single storey residential dwelling comprised of a lounge, kitchen, 2 bedrooms and bathroom. Walled with electric fence & intercom. Plot size 930sqm.

PROPERTY FOR SALE

Tlokweng

P700,000

PROPERTY DESCRIPTION

This is a lovely house that consists of 3 Bedrooms, bathroom/wash basin and toilet, lounge, kitchen and fenced. All bedrooms are spacious with beautiful built in units and cupboards. A spacious kitchen well furnished. Plot size 1000sqm.

PROPERTY FOR SALE

Tlokweng

P750,000

PROPERTY DESCRIPTION

This lovely house is near to town and walking distance from shops. This spacious family home with superb view offers 2 bedrooms with, large living area and kitchen, study and bathroom , the well established village invites you to forget the city around you, close to all amenities.

PROPERTY FOR RENT

Gaborone West

P12,700

PROPERTY DESCRIPTION

A 3 bed roomed home located in Gabs West with 3 bedrooms, (mes), Lounge, dining room, kitchen, family/ TV room, study, swimming pool, double garage. A servantâ&#x20AC;&#x2122;s quarters, garden, walled, paved and many more. Available from 01 Nov 2012.

PROPERTY FOR RENT

Mmopane Block 1 PROPERTY DESCRIPTION

P5,000

4 bedroom, 2 bathroom family home. Huge spacious family house to rent, plenty of room and parking, a must see. Available from the 01 September 2012.

BOIDUS FOCUS Classifieds Products | November 2012

INSPIRATION LOCATION: Denmark ARCHITECTS: Topotek 1 + BIG Architects + Superflex Superkilen is a half a mile long urban space wedging through one of the most ethnically diverse and socially challenged neighborhoods in Denmark. It has one overarching idea that it is conceived as a giant exhibition of urban best practice – a sort of collection of global found objects that come from 60 different nationalities of the people inhabiting the area surrounding it. Ranging from exercise gear from muscle beach LA to sewage drains from Israel, palm trees from China and neon signs from Qatar and Russia. Each object is accompanied by a small stainless plate inlaid in the ground describing the object, what it is and where it is from – in Danish and in the language(s) of its origin. A sort of surrealist collection of global urban diversity that in fact reflects the true nature of the local neighborhood – rather than perpetuating a petrified image of homogenous Denmark. Superkilen is the result of the creative collaboration between BIG, Topotek1 and SUPERFLEX, which constitutes a rare fusion of architecture, landscape architecture and art – from early concept to construction stage.

PRODUCTS

SUPERKILEN [2012] Source: archdaily.com

BOIDUS FOCUS Wednesday 14 November, 2012

Boidus Feature Page 13

5 Reasons Why Gaborone Central Business District Will Fail. by H. Killion Mokwete

>>> FROM PAGE 08

FAIRGROUND DEVELOPMENT AND PROLIFERATION OF MALLS According to Mabeo, government is to blame and especially the decision by BDC to develop competing commercial and business centre at Fairgrounds. Mr Mabeo points out that after failing to develop in the CBD with PEPCO, BDC then approached the Ministry of Agriculture to be allocated its 47 hectares in exchange for the fairgrounds permanent structures. This decision would prove fatal to the CBD’s future as the core of the City. Currently BDC, a government backed parastatal, is not only competing with private developers at the CBD but also taking the soul and life out of CBD. Mabeo points out that Government failed in regulating these developments with a perspective of what was intended at the CBD.

HIGH COURT OF APPEAL Failure in Creating Identity

Mushroom malls and Business parks COMPETING DEVELOPMENTS DEVELOPMENT

AREA

MIX

Game City (2003)

166,516 sqm

Variety of stores, restaurants, pubs, cinema

Riverwalk (2002)

19,800 sqm

Airport Junction (2011) Rail Park Mall (2011) Sebele Centre (2011)

36,000 sqm 31,324 sqm 9,875 sqm

Commercial Malls

Smaller Shopping Malls Fairgrounds Mall Molapo Shopping Mall Kgale View Shopping Centre Maru-a-Pula Shopping Centre Middle Star Shopping Centre Mowana Park Westgate Mall Office Park Developments Kgale Mews

Delivering a critique on a fellow architect is not easy and one should avoid criticizing colleagues but I tried to make this a constructive criticism.

Fairgrounds ORIGINAL PROPOSED CBD LAND USE-GABORONE CENTRAL BUSINESS DISTRICT MASTERPLAN, 1995 LAND USE

SITE AREA (sqm)

ALLOWABLE AREA (sqm)

Commercial (CO)

411,845

1,118,160

Civic/Community (CC)

63,245

60,000

Recreation & Open Space (RE)

20,265

Transport (TR)

30,000

49, 025

VOLATILE ECONOMY. Gaborone’s CBD took off in the midst of the first signs of the 2008 recession. Less than half way through its development, the recession is in full swing and land owners have odds stacked against them. Challenges of building a world class development in the CBD all of a sudden multiplied. Financial institutions are tightening their credit offerings and retailers/trading tenants require stringent viability tests on projects before they can sign up as potential tenants. Office space, as the predominant proposed use in the CBD is a commodity businesses need when there is good business. It cannot

The High Courts of Gaborone and Lobatse

by Luc Vandecasteele

CBD DEVELOPED TOO LITTLE TO LATE. In the earnest meaning of ‘the earliest bird picks the fattest worm’, CBD developers are picking the scrubs as prime developments have already been taken elsewhere across the city. The development of commercial and retail centres is currently peaked with more than 12 shopping malls across the city.

BUILDING CRITIQUE

be said so currently with this climate. The CBD provides a great test for the resilience of our young private development sector. For far too long, big buildings and complex structures in Botswana have been synonymous with government and the success of the CBD will see a reversal of this notion. In the year which the nations budget has sidelined construction of any new projects, the private sector is the only alternative for keeping the construction industry alive.

When approaching the new High and Appeal courts in the new Gaborone CBD, it is the size that is striking, more than the architectural expression of the building. The repetition of the facade and the repeating thereof on all sides of the building is surprising, as one would expect the building to recognise its environment and immediate surroundings. Having an east facade mirrored in the west facade is as if the architect did not recognise the orientation of the building, or choose not to take the completely different heat impact into account. The building airs a feeling of superiority, which it should. The building however lacks a clear entrance and exit. It lacks a defined roof and horizontal levels. The building does not respond to the Three Chiefs Monument and, at best, ignores it. The Court, as a building, lost the opportunity to add to its immediate environment and create a place of being. It became a long repetitive box with no attempt to add to the built environment. The proud adding of two domes on top of the entrances helps to identify the entrances, as the architecture did not set them apart. The domes are seen from afar and have, as a cherry on top, a statue of Lady Justice. Most appropriate one would say. But why do we need two statues? Are there two kinds of Justice? Would the architect suggest that the justice of the High court is different from that of the court of Appeal? Anyone suggesting the placement of two lady justices on top of the Supreme Court in the first world would surely be castigated. I can hardly criticize the inside of the court as the overzealous guard banned me from walking around in the court.

FAILURE TO CREATE NEW IDENTITY FOR THE CITY. The following key points on the CBD urban strategy summarize the original intent: •

The design Strategy promotes the idea of creating a specific place in a specific city with a specific national culture. Gaborone is not located in Europe, North America or South Africa. …..The development of a new urban precinct within Gaborone provides an unparallel opportunity to develop and promote an approach to urban and landscape design that recognizes and builds upon Botswana culture, environment and vernacular

•

architecture. A beautiful Place- The CBD should complement and extend the existing city centre in terms of its built and open environment.

LOBATSE HIGH COURT A Lesson in Creating a Monument and Preserving Heritage

To date not a single development has any traceable elements of our culture and national symbols. Civic structures such as the High Court of Appeal, Industrial Court, DPP all failed to capture any spirit of the City nor the nation. Attractiveness still also eludes any of the already developed structures. None to date holds any consensus as being a significantly beautiful building.

Preserved heritage by keeping the original magistrate little court building which was there. If you look, the buildings entrance is rotated and aligned with the old court at the rear court-yard. Space planning of the court was a learning curve as this was to be the high court in the country at the time. Plus tragedy would hit leading to change of judge three times in the process. The judges were the bosses of the process and as such the brief kept changing.

Boidus Feature Page 14

BOIDUS FOCUS Wednesday 14 November, 2012

Why Insulate your home? by Boidus Admin / Source: eco-insulation.co.za Insulate your home and help keep it cool in summer and warmer in winter. This is because building insulation resists the flow of heat. Heat is a form of energy and will always seek a cooler area, flowing out of the home in the winter and into the home in the summer. Insulation creates a barrier and reduces heat flow, therefore a thermal insulated home or office requires less energy for heating and cooling and as a result you increase your energy efficiency. As well as energy saving, home insulation also acts as a sound suppressor. Ceiling, roof or wall cavity insulation can reduce the transmission of sound from one room to another or from noise generated outside. In modern noise-laden environments, increasingly more homeowners are soundproofing their homes.

A well insulated home will increase the overall comfort of the home and add to its resale value. In todayâ&#x20AC;&#x2122;s times of rapidly rising energy costs it pays now more then ever to insulate and make your home an energy saving home. THERMAL INSULATION BASICS Thermal insulation acts as a barrier to the movement of heat, therefore slowing down the escape of heat from a building in winter (when the

outside temperature is lower) and the entry of heat into a building during summer (when the outside temperature is higher). To change the temperature of an object, energy is required in the form of heat to increase temperature (e.g. by using heaters), or reduce temperature (e.g. by using air conditioners). Once the heat generation or heat extraction stops, a reverse flow of heat happens and the temperature returns to ambient. To maintain a given temperature considerable continuous energy is required. Insulation reduces this energy loss.

WHY INSTALL INSULATION IN YOUR HOME Warming and cooling your home, home comfort control Lowering energy consumption Suppressing noise Providing fire resistance Increasing your resale value Lowering your carbon footprint with a natural safe, recycled insulation product

BOIDUS FOCUS Wednesday 14 November, 2012

Education Page 15

Vocational Training Opportunities for Batswana in the upcoming 2013 year

About CIFT Courses: Competency-Based Training Centre for Batswana

by Boidus Admin / Source: eco-insulation.co.za MOSHUPA BRIGADES P O Box 950 Moshupa TEL: 5490117/470 FAX: 5490118 Email: moshbri@botsnet.bw

Bricklaying Dressmaking Computer Studies

REF: VE/MOSH/2/3/ (2)

31st -10-12

TLOKWENG

BRIGADES

Ministry of Education and Skills Development Department of Technical Vocational Education & Training Tlokweng Brigades Private Bag T0 21 Tlokweng

Tel: (267) 3928332. Fax: (267) 3928617.

TRAINING OPPORTUNITIES FOR 2013/2014

Moshupa Brigades is a government school which is registered with Botswana Training Authority. Young Batswana men and women are invited to apply to the limited training places available at Moshupa Brigades in January 2013 in the following Vocations; Bricklaying & Plastering (C level & B level places) Textiles & Dressmaking (C level & B level places) Interview for both C & B will be held on the 12 & 13 of December 2012 at 0830hrs. Interested applicants should send their applications including certificate, OMANG and references to etc to;

TRAINING OPPORTUNITIES Tlokweng Brigades, government training institution invites suitably qualified candidates for training opportunities in the following fields: 1. Carpentry and Joinery “C” and “B” levels (examined by Madirelo Training & Testing Centre) 2. Dressmaking/Fashion Design “C” and “B” levels (examined by Madirelo Training & Testing Centre) Entry Requirements: • For all “C” level courses, candidates should be in possession of Junior Certificate or above. • For “B” levels, candidates should be in possession trade test “C” in respective trade/course Physically disadvantaged candidates are encouraged to apply. Applications should be addressed to:

THE PRINCIPAL MOSHUPA BRIGADES P.O. BOX 950 MOSHUPA

The Principal Tlokweng Brigades Private Bag T0 21 TLOKWENG

CLOSING DATE FOR APPLICATIONS; 30 November 2012

CLOSING DATES FOR APPLICATIONS: 23/11/2012

COMPETENCY BASED INDIVIDUALISED MODULAR TRAINING (CBMT) > CITF provides training programmes using CBMT, which is a systematic approach to skills development in order to perform work-based or occupational tasks. Competency refers to an individual’s demonstrated knowledge, skills and attitude displayed to a specific standard to attain intended results or outcomes. The CBMT system is flexible and provides for the following: • Open entry/Open exit: Any trainee can enter and exit the system at any time, having demonstrated mastery of tasks, following completion of training programmes. • Self paced: The system is individualised, therefore allowing trainees to work at their own pace, do self checks and request to test when ready to do so. • Tailor made: All competencies offered are actual on-the-job tasks and projects are life size. • Recognition Of Prior Learning/Recognition of Current Competence: Recognition of prior learning (RPL) is a process whereby through assessment, credit is given to learning which has been previously acquired in different ways- other than formal methods. Trainees are allowed to demonstrate previously-acquired skills and are tested before undergoing training. COURSES OFFERED > CITF offers the following skills training programmes for the building and construction industry: • Bricklaying • Plastering • Carpentry • Plumbing and Pipe Fitting • Electrical Installation • Tiling • Painting and Decorating • Welding and Fabrication • Civil Engineering Construction: • Site Surveying • Shuttering/Formwork • Steel Fixing • Scaffolding Erector • Concrete Hand • Heavy Plant Operator • Safety and Health • Supervision and Site Management • Estimation and Tendering WHO USES CITF SERVICES > CITF gives priority to the building and construction industry. However, government employees and individual Batswana interested in the building and construction are encouraged to apply in order to acquire the skills necessary to assist in obtaining building and construction employment. ENTRY REQUIREMENTS > No specific qualifications are required to enrol at CITF, except that literate, semi-literate or illiterate Batswana men and women need to be aged 16 or over and should be able to read and write. DURATION OF COURSES > Since the emphasis is on the acquisition of practical competencies, CITF is able to produce competent semi-skilled artisans in 4 to 12 months. WHERE TRAINING TAKES PLACE > Training is carried out at CITF main centre in Gaborone. CITF has Mobile Training Units (MTU) which provides on-site or close to site skills training to improve the quality and productivity of artisans in the building and construction sector. Heavy plant training is only carried out on site because of the prohibitive costs of acquiring machinery.

HOW TO CONTACT CITF >

Cell: (+267) 71374587 Cell: (+267) 72881887 Queries: (+267) 73933533 Fax: (+267) 3933541 Email: admissions@neweracollege.ac.bw Mail: P.O. Box 402134, Gaborone, Botswana Address: Plot 36158, Block 8 Gaborone, Botswana

Contruction Industry Trust Fund Private Bag BO 122, Gaborone Tel: +267 3911362 Fax: +267 3906380 Email: administrator@citf.co.bw Plot 18006, Samora Machel

Property / Financing Page 16

BOIDUS FOCUS Wednesday 14 November, 2012

Penthouses Coming to Gaborone.

Office Premises For Sale Grand Union Buildings Plot 54374 Central Business District Gaborone

by Boidus Admin

How About Property Investment? by Leano Joconia

For the first time in Botswana Housing market, soon CBD will introduce its own penthouse suites apartment at the heart of town. 1. iTOWERS, SOUTH TOWER Phase Two of the iTowers, the South Tower will be Botswana’s tallest ever building once completed in 2014. A milestone development by all standards, it will principally serve as the residential tower, with only the ground and first floors devoted to retail space. Beneath the ground are two floors of parking, with residents given the option of either purchasing or renting parking bays. Its prime location will give all residents access to nearly all desired services and amenities; most of them within walking distance and within the development itself.

With a Sky Bar on the 19th floor of the North Tower, an art gallery in its main lobby, and a laundry availed for all residents, just to mention a few of these services; the iTowers are truly a place for work and play, all day every day. 2. GRAND UNION BUILDINGS: Description The Grand Union Buildings development comprises of four semi-detached and self-contained ‘Blocks’. Each ‘Block’ has four floors (Ground Floor + 3) comprising of the following: • Ground Floor – Commercial Use; • First Floor – Office Use; • Second Floor – Office Use; • Third Floor – Residential Use (Apartments x 2). Each office unit is a self-contained open plan area with its’ own male and female toilets, kitchenette and exclu-

sive balcony area. Access between the floors is via a lift and staircase through a common core area. Forecasted Letting Information Office space in the new CBD currently rents at between P110.00/m2 and P120.00/m2. Due to the level of supply of office space on the market and coming on to the market we envisage rental rates of between P95.00/m2 and P105.00/m2 at the time that the Grand Union Buildings is complete i.e. late 2012/ early 2013. Parking bays could also be let at P175.00 per parking bay per month i.e. Unit 3A has ten designated parking bays, for which the tenant would be required to pay P1,750.00 per month over and above the base rent.

Botswana Property Performance Report Summary by Boidus Admin / Source: IPD Presentation

• The first IPD Botswana Property Performance Report shows that the total return in 2011 was a healthy and globally competitive 20.9%. • This return is comprised of a 10.8% income return and 9.2% capital growth. Growth in nominal terms was in fact stable, however, highlighting the importance of income yields in the property market. • 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. • The report presents a fully-fledged indicator of results that will provide effective comparisons for market trends going forward, and is a significant step forward in the promotion of transparency in the Botswana property industry. • The report is expected to pave a way forward for the opening of Botswana’s property investment sector to a range of new buyers, and provides an important tool for local players.

There are numerous investment paths in Botswana and we know that investing can be quite daunting. Owning real estate is a great investment, especially in a volatile marketplace. However, while real estate in general is a great investment, it is important that you choose the right investment property. Choosing the right investment property takes hard work and a fair amount of research, but if you choose wisely, your investment property will be much more valuable to you in the future. Why choose property investment? Botswana has a vast amount of unused land and the property market is growing. With this Botswana remains a good property investment area. Choosing an investment property is more than choosing a home to live in. It is a financial decision based on a number of key criteria. With property investment you will have the power of “Leverage” as you have a choice to finance the property you want to invest in or choose a financier to help you acquire this property. But remember that financing property from your pocket might just dent your cash flow. Investing in property is not like investing in the stock market where prices in one day can go down and up quite significantly. Only in certain situations where the economy was bad, property investments may be affected slightly. Property investment offers a combination of rental income and capital gains. Investing in property is not only going to give us a positive cash flow but also the potential capital gains. If you have a property, you have full control of how you will increase the value of the property. There are many ways that can be done to increase the value of property, ranging from very simple things like painting the property. Unlike a savings or deposits where interest is given is usually much lower than the rate of inflation, property prices usually follow at least the inflation rate. In this case, investing in property is still a better option to protect them from inflation. How do you choose an investment property? There is a lot to consider when choosing the type of property to invest in. If investing in more than one property it is highly advisable to buy across different areas/locations. This can spread the risk of your chosen area not performing as well as you hoped. If you are only investing in one property and for the first time then go with what you know. Choose an area that you are familiar with, preferably one that you have lived in so that you know the desirable spots and the available amenities. If you are looking to invest in an area you are not familiar with then you will need to do some research into things like population growth and nearby industry. Equally important to consider are age of population, average wealth of population, new housing going in the area and employment levels. Also determining whether or not the property will bring in a positive monthly cash flow for you is one of the most important factors. You do not want to be stuck with property that does not give you any returns but rather eating from your pocket. How do you acquire an investment property? Once you’ve found the right property, the actual mechanics of buying it will be the same as if you were buying a home to live in. We at Bank Gaborone have developed the right investment product for you. The Mosasana Home Loan as we call it is just what you need to make your dreams become reality with regard to acquiring that piece of land and having to call it your own. We understand that it is not easy to finance property with your savings. So make the right choice today. Choose wealth. Choose property investment. Choose Bank Gaborone for finance.

Contact Bank Gaborone on: Email: homeloans@bankgaborone.co.bw Tel: +267 390 11 33 / +267 367 15 07 Customer Service: +267 713 333 00

BOIDUS FOCUS Wednesday 14 November, 2012

Comments Page 17

EDITOR’S NOTE

State of the Nation Address Gives No Hope to the Building Industry by H. Killion Mokwete, RIBA Chartered Architect

It is no secret that the building industry in Botswana is tethering on the brink. For the past two years, the biggest employer, who is government, has been on sabbatical. The government’s freeze on new projects since 2010 has still to take its final toll on the industry. As of last year Christmas, the construction industry through BOCCIM was on its knees at the HLCC requesting for an industry bailout fund. It was hoped this would be reflected on the budget speech by Minister Matambo, but nothing happened except more of the so called maintenance budget. Minister Matambo went even further by suspending more government earmarked projects. Some twelve months down the line, there is still no help in sight. Recently the President of Architects Association of Botswana, held a press conference, at which he reported how architects are struggling and closing shops left and right. He warned that if nothing was done, the lack of jobs would lead to a serious brain drain, with some professionals completely abandoning the industry. Amid all this the President’s State Of The Nation Address comes very short to even encapsulating the industry’s dire straights. Programmes that were mentioned under housing such as SiHA and BHC’s new mandate to deliver SHHA housing are in my view too little for the scale of the problems the industry face. The schemes although with some social good, don’t even come close to tackling critical needs of the industry. The challenges of corruption and failure to deliver projects in the industry are growing daily and the solutions highlighted in the speech as the answer to the problem are in my view a non-starter. DBES, which is at the Centre of most of the problems, have proven over the years to be completely incapable of handling any project, no matter its complexity. Adding more bureaucracy and hiring more project managers and audit teams does not go to the root cause of the industries problems. Amid all this, the industry is still largely unregulated, some years after regulating bodies across the profession were meant to start. To date only Engineers and Real Estate are anywhere near regulation and registration. The industry needs real leadership and honest attempts at solving its problems.

Boidus Team EDITOR H. Killion Mokwete DESIGN Bridget T. MacKean JOURNALISM Kibo Ngowi SALES Ame Zachariah DISTRIBUTION Nako Kabomo GUEST COLUMNIST Jan Wareus GUEST FEATURE Bennedict Mabeo Luc Vandacasteele

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Boidus Botswana Discussion A heading in MMEGI says, ‘Citizen architects struggle to find jobs’. How true is this Caesar Tshupelo, Vincent Moapare, Pedriel Mokwadi Nyame, Gorata Kgafela,@Batululi Cloo Gabosekegwe and all architects in here?

Caesar Tshupelo: Architectural practices have even retrenched staff, us included. New graduates from UB & Limko including overseas trained ones are having it tough. Thats where Boccim & AAB has to look effective Boidus Botswana

Boidus Botswana: Especially BOCCIM! They have the fast track to the highest office in the land through the HLCC. Boidus Botswana: at some point towards the end of last year, there were rumors of an ‘industry bail out’. what ever happened to it Boccim Botswana? Gorata Kgafela: The AAB had a press conference yesterday and had invited all members of AAB to come and engage with stakeholders regarding the state if the profession in Botswana. Unfortunately not many of our members showed up. People please lets walk our talk and be active in finding effective solutions to the state of affairs. We need to stop pointing fingers as to who should be doing what or saying what to who. If you want change, then be the change you are looking for. The AAB ExCo needs your support. We will inform you of task forces that we wish to form to make a change. I trust those of you with folded arms will roll up your sleeves ang get your hands dirty! Boidus thanks for opening up debate on Architecture. You are doing your part and I salute that. Boidus Botswana: Can non members (architects) offer support? How? Gorata Kgafela: We encourage all Architects practicing in Botswana to become members of the AAB. And yes I believe anybody who believes they can assist is more than welcome to do so. It’s a matter of understanding where they can fit. For example we need to upgrade our website, we need secretarial and accounting services, advertising space in the media etc. Leo Senna: My concern is that there seems to be no political will to protect and upgrade the profession.. the Government already has a certain perception about consultants as result of projects which have not been delivered for one reason or another.. Surely then there is a need to try to work getting some political muscle behind this

cause.

Boidus Botswana: Politicians have never been on the side of professionals, least of all architects. We are a tainted lot and we need to redeem our profession. First we need to occupy our space amongst other professionals. Batululi Cloo Gabosekegwe: The best thing we can do for ourselves is to rally the troops and get our profession protected by an act of parliament. The biggest obstacle is that most of our colleagues that call themselves architects are not qualified to call themselves that and will not enjoy the privilege once this act of parliament is passed and are therefore not keen. Boidus Botswana: the act has long been passed and that is what has resulted with the ARC. What we need is to learn from engineers how they developed their code of ethics and gotten funding for the setting up of the registrar Batululi Cloo Gabosekegwe: This profession e mo mathateng...even poor old Cloo has no clue what’s going on...act of parliament passed ka 2008, but no change whatsoever since then.. Vincent Moapare: Spot on Gorata Kgafela! It is not compulsory for architects to join AAB so we respect decisions of those who have chosen not to become members. In the same vein, those architects working in Botswana who don’t see the need to join and strengthen AAB, should not be asking AAB to advocate for them. However it would progress our profession faster if we operated in solidarity as a single amplified voice rather than a divided and disjointed lot. AAB is open to new ideas and initiatives, be it from its members or non-members, be it from architects or non-architects. So i will encourage, in particular, those who are architects and are not members, to come forward and share with us their concerns, reasons etc, for their not joining, perhaps we could begin to find some common ground. The new Executive Committee of AAB has kick-started a public awareness campaign to engage the public in formal and informed debates on any matters architectural. We wish you will support us in this endeavour..@Caesar Tshupelo, Boidus Botswana, Design Genro, Tshoganetso Rantshilo,Ishmael Flash Mosinyi

Tshiamoh Sefetane posted to Boidus Botswana Hi. Why do u pay more money for structural drawings than “plans”/architectural drawings? (Apologies for my being naïve..) Starting a multi res double stories buz,have the plans made n hv 2 do the structural thing n its murder! Boidus Botswana: Tshiamoh Sefetane, structural drawings are a requirement for any domestic plan more than a single storey to be approved for planning and building control. The idea is that your building needs to show that it is structurally sound and won’t be a safety hazard. Multi residential especially all need strutural drawings for approval. Boidus Botswana: to be fair engineers would be paid less than the architect..on a normal set up...unless ofcourse the engineer is the owner of the job. just make sure you are paid right. architects..we tend to under pay ourselves. Tshiamoh Sefetane: But when we build “normal” houses ko bo Kanye we dnt engage structural engineers,kapo jang?

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Comments & Letters

Tshiamoh Sefetane: @Bodius,ok... I get it! U r sayn MORE than a single story. Tshiamoh Sefetane: But the Q is-why do u pay a Structural Engineer more than an Architect? Boidus Botswana: when you build any house in a ‘planning area’, you supposed to get planning application and if the house is more than single storey then yes you will need structural drawings. Boidus Botswana: Tshiamoh Sefetane, to my knowledge, engineers rates are normally less than that of an architect. But ofcourse sometimes architects under-charge themselves wheres the engineer will charges full rates. This does not mean the engineer should be paid more than the architect.

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Professional Practice Page 18

BOIDUS FOCUS Wednesday 14 November, 2012

What Is A Performance Bond, Its Purposes And Implications?

by Boidus Admin [This essay is adapted from an essay by The Entrusty Group, a multi-disciplinary group of companies, of which, one of their specialisations is in project, commercial and contractual management published in Master Builders Journal.] Bonds are provided as useful means of creating financial security for the Employer for the Contractor’s failure to perform his contractual obligations. Generally, a bond is an arrangement under which the performance of one party (A) to another party (B) is backed up by a third party (C). What happens is that C promises to pay B a sum of money if A fails to fulfil the relevant duties. In this context A is commonly known as the principal debtor or simply principal; B is called the beneficiary; and C is called the bondsman, surety or guarantor.

•

In the construction context, such back-up is likely to come from one of the two sources below: (a) Parent Company Guarantee – the contractual performance of one company within a corporate group is underwritten by other members of the group; or (b) Bonds – normally provided (at a price) by a financial institution such as a bank or an insurance company. • The obligations most commonly guaranteed by bonds or guarantees are as follows: • Payment: For example, the Employer’s

duty to pay the Contractor or the Contractor’s duty to pay a Sub- Contractor. A Contractor may also provide a bond in favour of the Employer, in return for an early release of retention money or, indeed, completely replacing the retention provisions. If defects are then found in the building, the Employer can call on the bond, rather than the retention money, to finance the necessary remedial work. Specific Obligations: Such as a promise by a Sub-Contractor not to withdraw a tender. This may be of practical importance where, say, a main Contractor tenders on the basis of bids received from domestic subcontractors. If the main Contractor, having been awarded the job, finds that a Sub-Contractor’s bid is no longer open for acceptance, the main Contractor may then have to pay a significantly higher price to another subcontractor for that part of the work. Performance of the contract in general: This is the most common type of bond, in which every aspect of the Contractor’s performance is guaranteed. The contract fre-

quently requires a bond, normally to a level up to 10% of the contract sum. The usual form of bond used in Botswana is a Performance Bond which guarantees the Contractor’s performance of the contract with an undertaking to be bound in a specified sum until (and unless) such performance is achieved. Upon the Contractor’s failure to perform in full, the Employer is entitled to call on the surety (or bondholder) to make good the loss, up to the maximum amount of the bond. Since a bond is a contract of guarantee, it requires to be evidenced in writing. Further, since the Employer gives no consideration (save that the Contractor must include the cost of the bond in his price for the works) the bond must be made by deed. The construction contract and the bond are inter-related, since the bond is a tripartite transaction involving the parties to the construction contract and the bond. Nonetheless the bond is a separate and wholly independent legal document enjoying autonomy from the construction contract. In that sense the bond is independent of the construction contract.

Performance bonds are traditionally categorized as being of two types. The first type is the ‘conditional’ bond, where the surety agrees to pay if and when certain specified conditions are satisfied. The most likely condition would be any default (i.e. breach of contract) by the Contractor. The principal characteristics of this type of bond are namely: • It is a contract of guarantee whereby the surety (guarantor, i.e. the Bank) accepts ‘joint and several’ responsibility for the performance of the Contractor’s obligations under the engineering and construction contract (i.e. the principal contract); and • The surety only becomes liable upon the operation of the ‘trigger clause’, i.e. proof of a default/breach of the terms of the principal contract, and the Employer (beneficiary) sustaining loss as a result of such default/breach. The second type of bond is the ‘unconditional’ bond which entitles the beneficiary to call upon the surety for payment whether or not there has been default under the principal contract, provided only that the call is not fraudulent. These bonds exhibit the following characteristics: • It is a pledge by the surety (guarantor, i.e. the Bank) to indemnify the beneficiary (i.e. the Employer) merely when demand is made upon him by the latter; • It entitles the beneficiary to call upon the surety for payment whether or not there has been default under the principal contract provided only that the call is not fraudulent The duration of a guarantee depends upon the terms in which it is given. If no specific time limit is mentioned, then a surety for the Contractor’s performance is not released by completion or even by the final certificate but remains liable, as does the Contractor, for any breach of contract which comes to light within the relevant limitation period. Generally, as a rule, a performance bond remains in force until the stated discharge date which is usually either after practical completion of the works or after making good any defects. However, should the practical completion or making good of defects occur earlier than the bond date, the bond cannot be recalled or withdrawn unless the client agrees to an earlier release date. Furthermore, a performance bond is not an insurance policy which normally is a contract of indemnity under which the insured is indemnified in the event of loss, subject to the adequacy of the sum insured. Moreover, there are three parties under a performance bond (i.e. the Contractor, the client and the surety company) as opposed to two under an insurance policy (i.e. the insurer and the insured). Once a bond is issued, it cannot be cancelled until the stated discharge date or until the subject matter of the indemnity has been completed satisfactorily, however, an insurance policy can be cancelled before its expiry date. The financial limits of liability are invariably expressed in the contract of guarantee. It should be made clear, in order to avoid disputes, whether interest on money due, and legal costs, are included in the overall limit. It is also worth noting that some bonds provide for the entire sum guaranteed to become payable on any breach by the principal, regardless of how serious or trivial that may be. If this is the case, the provision is likely to be struck down as a ‘penalty’ and the beneficiary will be entitled only to so much of the sum as will compensate for the actual loss which has been suffered.

BOIDUS FOCUS Wednesday 14 November, 2012

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