Vantage Properties - a property investment consultancy firm - is seeking to close the gap of lack of information among the citizens by carrying research and providing valid information that will help stakeholders in the property sector make informed investment decisions.
Fairly new in the market, the company insists that currently there is an information gap. Established in June 2008 with the objective to conduct property market research and educate citizens about the market, Vantage property then started by conducting seminars that were intended to educate the public and provide them with information on rentals as well as housing price market.
Vantage Properties offers services such as property market research, property investment analysis and consultancy services. The company intends to measure the performance of the property market and establish its contribution to the local GDP.
This week the founder and Managing Director of Vantage Properties, Sethebe Manake fielded questions, giving a background of the company and as well as the state of the local property market.
With nine years in the property market industry accumulated since graduating from University of Cape Town, South Africa where she was reading for Bachelor of Science Degree in Property Studies, Manake is well informed about the crescendos of the local property market. Add that to experience she gained from various property companies among them Pam Golding where she worked as an intern while still pursuing her studies, RDC Properties under Property and Asset Management, Khumo Properties and STANLIB where she worked as Real Estate Asset Manager.
With the experience under her belt there is no doubt that Manake is in a better position to offer independent views concerning the market.
Manake appreciates that what they are doing is not an easy task as they are offering services which may not have existed before and this results in some kind of rejection from members of the public and other organisations.
They are currently trying to build working relationship with commercial banks which, she says, have been accommodative to their ideas. They are also focusing on winning over the government as it is a facilitator of many sectors.
When Vantage Properties commenced operations some seven years ago, Manake says they offered services on consultation basis until 2009 when they stopped. They resumed offering services in 2014 and have started researching on the trends of government spending, bank rates and the criteria used by commercial banks in financing property.
All this resulted in the publication of Botswana Property Market Report for 2014 which was launched earlier this year. The purpose of the report is to provide developers with well researched data on property, its market dynamics and performance. Vantage Properties - which is made of four staff members, including the MD - is in the process of collecting statistics and observing trends on many fronts and the objective is to impart knowledge on the property market.
The statistics, she says, will help all the stakeholders involved in the property market when making decisions, including the government and commercial banks who are mostly the financiers of property acquisition. The market dynamics are forever changing and it is for that reason that Manake says they will continue carrying out educational seminars as well as to collect trends. However, the challenge facing the company is lack of cooperation from individuals and organisations. “Individuals do not want to answer questions for our surveys and as such it becomes difficult to ascertain if they are overpaying or underpaying for instance in rentals,” she says.
Somehow this lack of information sharing makes the job difficult for them to establish proper trends of the market. However all is not lost. “This is something we are passionate about,” Manake says, adding that what makes it difficult is the mentality that exists among some people who claim to know all the dynamics of the market while the opposite is the truth.
She says the danger of holding such a view is that many end up making uninformed decisions without first establishing what they are doing. Through a series of researches and analysis they are carrying, Vantage Properties is seeking to make the country attractive for investment in property. Currently the capital city is experiencing considerable construction of property, leading to somehow oversupply in the market. This has somehow led to developers vying for the little available land as the demand catches up with supply.
The local property market has always been observed as flexible. According to the Investment Property Databank (IPD) Botswana Annual Property Consultative Index released in 2013, the total return for all property was standing at P2.8 billion. At the time this was 17.9 percent growth compared to 20.9 percent registered in the previous year, which demonstrated the resilience of Botswana property market. At the time, industrial property outperformed other sectors such as residential and other property. With Gaborone in short supply of serviced land, Manake anticipates that Palapye will soon experience the same challenge.
This is because Palapye is being transformed into an industrial town and establishment of international status institutions such as Botswana International University of Science and Technology (BIUST) that side. But according to Manake, the problem is not the shortage of land. “Our perspective is that there is no shortage of land but shortage of serviced land,” she points out. However taking services to a virgin land will require more financial commitment on the part of the government as is currently the case, depending on the type of the land tenure.
The challenge of shortage of serviced land in the country could be addressed through consented efforts from both the government and the private sector. Manake feels that the existing situation whereby the government is doing everything is not working in anyone’s favour.
Asked about her views on the level of participation by the locals in the property market, she responds in earnest; there are those who wanted to invest in property but gave up due to misinformation they have about the market one of them being who should buy property and who should not.
“There are those who are trying. This kind of people will use every opportunity to acquire property. They however do this without a proper strategy on what they intend to achieve,” she says adding that interest by the locals in property market can be seen by the way every time an opportunity arises for land application people turn up at significant numbers.
However, the limitations of those with interest to invest in property, particularly the residential market may have to contend with challenges faced by commercial banks whom are the financers.
The liquidity constraint which is currently faced by the local commercial banks has become the limitations to those who want to be financed as the banks have adopted strict measures when it comes to financing. The Vantage Properties MD explains that the property market is an element of income. This she says, is because everything affects the property market simply because there is no economic activity that happens outside the market.
Despite existing challenges, Manake believes there is huge potential in the industry with an opportunity for growth and her view is that there will not be any bubble burst in the property market.