Baga- Malete Trust now over P200m richer
The victory by the Balete over the ownership of the remaining extent farm Forest Hill 9-K0 has enabled the Morafe’s Trust (Baga-Malete) to be at least P200 million richer from the present estimated value of the farm.
Five years ago when Balete decided to take government and its machinery such as the Malete Land Board, and lately Attorney General head on –fighting for their land that they bought in 1925 through their then chief Kgosi Seboko Mokgosi from Aaron Siew of Cape Town, South Africa.
The Morafhe subsequently engaged a Gaborone-based valuing Company, named Roscoe Bonna Valuers to value their only asset that they own.
In its valuation report titled “REPORT AND VALUATION UPON AGRICULTURAL PROPERTY REMAINDER OF FOREST HILL FARM 9-KO” - Roscoe Bonna Valuers stated that subject to their terms of reference and general
remarks, “we value Remainder of Forest Hill No.9-KO as follows: Open market value of P195,000,000 only”. The valuation was done on 19 April, 2018.
The piece of land had been a subject of litigation between the government, its subsidiaries and Morafe for years- the matter was laid to rest on Tuesday when a full bench of the Court of Appeal dismissed with costs an appeal lodged by the Attorney General subsequent to losing a high court case filed by Morafe led by Kgosi Mosadi Seboko.
The CoA Coram of four out of five Justices dismissed the appeal with cost, which costs shall include that of two counsels as well as confirming the high court judge.
Considering the length of the case and the fact that Balete were represented by Geoff Budlender SC and Advocate Mitchell De Beer from Cape Town, South Africa who all along have been appearing with instructing attorneys in Otlaadisa Motlhala, Tshiamo Rantao and Kgotso Botlhole, while the state engaged the services of different private Attorneys until at the CoA where they brought in Advocate Sidney Pilane, Advocate Dr. Sadique Kebonang, and State Attorney Otlaadisa Kwape as well as Attorney Bolotsang - then the cost of the case is estimated around P1million.
Based on the then open market value of the farm, there is no doubt that currently the farm’s value is far more particularly considering that land is scarce, highly in demand and the farm’s proximity to the city of Gaborone as well as developments around it.
In the report, Roscoe Bonna states that subsequent to receiving instructions from Trustees of Ga-Malete Trust to inspect and value the property in question, they subsequently found that in determination of the value of this farm, consideration of this possibility has to be taken in account, since most likely buyers would consider this type of land for peri-urban users such as homes and small holdings. The four (4) hectare small holdings have sold in excess of P1m or P250.000 per hectare.
The farms which are for ranching are generally in blocks which are far from Gaborone. These have been exchanging in excess of P15, 000 per hectare with developments. It is unlikely for a buyer who wants to ranch to consider this portion. The possibility has been discounted fully.
Some similar land has been expropriated by government rates ranging between of P6-15 per m2 depending on the location and quantum.
“We also understand that the subject parcel of land was considered and priced at P9 per m2 some decade back. Since then the market has been strong and growing as population and appetite for land increased. With passage of time, we can safely analyse the rate at about P12/m2”.
Historically compounding of return on capital for the initial investment has been estimated around 10 percent. The initial interest charged on the balance of the purchase price was 5 percent and this was peace times globally.
Currently inflation is in the vicinity of 3.5 percent and prime lending rate is 6.0 percent. Most authorities charge 12 percent per annum, or 1 percent per month as interest. It can safely be stated that 10 percent increase in cost of
living over years would be regarded fair.
Roscoe Bonna Valuers therefore anticipated a strong demand for this property due to its location if it was marketed today given the prevailing market conditions for high-level uses.
In an interview with Botswana Guardian Kgosi Mosadi Seboko who confirmed the 2018 value price of t her Morafe’s farm, said they will meet and determine what projects to engage which will improve the livelihoods of the community