Exploring Botswana’s Investment Opportunity

Exploring Botswana’s Investment Opportunity

In 2004, Umesh Loona founded Apex Properties in Gaborone, Botswana. Having arrived in the country in 1998, Umesh had come to realise that the area held great potential for property investors. As he puts it: “Where there is a problem, there is a business.” The Gaborone market is an interesting one, with many examples of growth. Not one to sit back, Umesh has often been the driving force behind this growth, as his recent residential development proves: “We’re building and funding the roads. There’s an infrastructure problem, so we’re fixing it.”

Having qualified as an accountant in his native India, Umesh initially started an accounting firm in Gaborone. This background, he explains, helped him to move the property business to a new level. Two years after moving into real estate, he decided to try his own hand at property investing. But it didn’t all go as planned. They struggled, initially, to get a loan approved – It took eight months to get that done. There were many unexpected expenses but, Umesh explains, they learned a lot about property and investing in the process.

“With property development, it looks easy, but you need to know your facts. There can be a lot of hidden costs and timing problems. Property is not a get rich fast scheme. It takes a long term commitment and patience. But the beauty of property is that it also builds you up as an individual,” he explains. This drive and determination is palpable when speaking to Umesh. It’s also clear when he describes his goals for the company.

He’s planning to expand Apex Properties into the rest of Southern Africa and, eventually, would like to list the company on the stock exchange. A key component of this, Umesh explains, is investing more money into infrastructure: “If we can do it for our clients, we can do it for ourselves. There are challenges in the local market, but they can be overcome with enough hard work.”

In 2006, Apex Developments was founded with the sole purpose of investing in and developing property. Umesh is currently working to launch Apex Next Limited, to be listed on the Botswana Stock Exchange, and focusing on buying and managing properties under financial stress.

Apex Properties offers a full range of services to clients, including property management, property valuations, brokering, advisory services, as well as development and investment innovation. Umesh makes it clear that he and his company do all it takes to achieve success for their clients: “I live by the Philosophy that you need to fight for what you want. Nothing is built over night, but as long as you are committed to your goals, you will get there.”

Growth in Botswana

According to the Global Property Guide, yields of between 6.5% and 9.5% can be expected on residential property in Gaborone and Francistown. This is supported by recent research conducted by the Centre for Affordable Housing Finance in Africa (CAHF), which shows that rental properties in the city centre currently offer high gross rental yields of 7.9%. Outside of the city centre, rental yields of about 5.5% are expected.

The Africa Investment Index 2016 ranks Botswana as the most attractive investment destination in Africa, due to an improved credit rating, favourable current account ratio, import cover, and ease of doing business.

Foreign investors are welcome in Botswana, with only tribal and state land being off limits. Buying costs are also relatively low, between 6 and 8% of the property value.




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