Wednesday, September 23, 2020

BR moves to diversify income with land under its portfolio

Botswana Railways (BR) is starting to utilise the land resource it has acquired over the years along its Ramatlabama to Ramokgwebana railway line.

Its subsidiary, BR Properties, is entering into strategic partnerships that will see the development of P700 million worth of land.

David Tsheboeng, the Managing Director of the property outfit, told Sunday Standard this week that they are currently doing earthworks for the flagship project at the 8 hectres land at the Gaborone Bus Rank.

“We want to finish the earthworks by June 11 and start main construction by July. The plan is to finish the project by third quarter of 2011,” revealed Tsheboeng of the shopping mall project.

The piece of land behind Gaborone Hotel (GH) will produce a shopping complex that will compete with already existing shopping malls in Gaborone and surrounding areas.

This will add to Gaborone Main Mall, BBS Mall, African Mall, RiverWalk Mall, Game City, CBD and yet another mall to be announced in the coming weeks to be built in Gaborone.

It will have a mix of tenants, including stores like Woolworths, Choppies, Clicks, restaurants and other retailers attractive to 60, 000 people who use the pedestrian bridge over the railway line everyday.

BR will develop 8 x 70 meter manned bridge that will link people from the Shoprite area straight to the shopping center and spend additional P4 million improving access roads around the Bus Rank.

Hawkers will also be arranged in that only registered ones will be allowed to operate within the mall with a new taxi bay able to accommodate 92 taxis to be erected. This will be in addition to 840 car parking slots for customers.

Tsheboeng revealed that they are oversubscribed in terms of tenancy and he is not concerned about competition because every other business will like to be at the Bus Rank which is highly populated.

Thousands of commuters use the Bus Rank area everyday as they connect to greater Gaborone including major centres like Molepolole, Mochudi, Lobatse, Ramotswa, Kanye and hamlets around the city.

Research have shown that people who purchase items regularly are in the low income brackets while the middle to high income groups, buy cars and property.

The project comes at a time when there is criticism directed at the state enterprise of shifting from core business of transporting passengers and goods to property.

“We are trying to diversify the BR income”, added Tsheboeng. “It is a trend throughout the world”.

BR Properties was created in 2007 after 2003 decision to have an entity that will look after the land assets, but by then the only stumbling block was the Act that created the railways parastatal.

For the Bus Rank project, the property outfit has partnered with Bifm- Iris (former Rand Merchant Bank), that will contribute P20 million and P15 million respectively and Treddinick Botswana with P15 million contribution.

BR will own 58 percent of the project that will cost P300 million to develop.

Another CEDA sponsored citizen consortium will contribute the other P30 million.

Tsheboeng revealed the target is to raise P100 million equity from partners and borrow the remaining P200 million from local financial institutions.

All the financing is targeted to be completed by end of June.

Last year, the company flouted a tender in the local media inviting partners of which 34 companies replied to the advertisement.

“In the tender, we were strategic; we considered prime sides. This one (Bus Rank), we think it is better than the one in Francistown. We think it has more chance of succeeding”, said Tsheboeng.

The next project after Gaborone will be in Francistown and then Mahalapye.

BR Properties is replicating measures taken by Spoornet in South Africa, under Transnet and Rail Properties Ltd in the United Kingdom.

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The Telegraph September 23

Digital edition of The Telegraph, September 23, 2020.