CCA's latest annual report showed that the authority received and approved the largest notice of mergers and acquisitions from the real estate sector predominantly from asset managers who have mandates from the BPOPF.
“In the period under review, the authority assessed and finalised 24 transactions from the Real Estate sector. Most of the mergers in the sector involved the Botswana Public Officers Pension Fund (BPOPF) acquisitions through property asset managers Seventy 5 Degrees (Pty) Ltd and Khumo Property Asset Managers,” the authority revealed.
Amendments to the Pension Fund Rule 2 (PFR2) by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) mandate pension funds to raise their domestic holdings to a minimum of 50% of their total assets, progressively between 2023 and 2027. A capital markets development has initiated a hunt for assets in the local market as a storm of capital makes its way to the local market.
By December 2023, pension funds aimed to retain at least 38% of their assets by value in the local market, but in turn surpassed this target reaching 40.6% of total assets invested locally.
The CCA in its annual report apportioned activity in real estate to the changes in Pension Fund Rules.
“This could be attributed to the new strategic policy that was introduced in the past two years that instructs 50% of the pension funds to be invested locally. Prior to that offshore investment was 70%, and 30% locally,” they revealed.
BPOPF recently revealed that it was intensifying its search for large-scale investment opportunities as it faced mounting pressure to meet its ambitious growth targets by December 2024.
BPOPF CEO Moemedi Malinda told BusinessWeek then that the pension fund has already identified aligning interests and is actively working on several high-value deals. Some of these opportunities have been successfully closed, whilst others are still in progress. However, the hunt for more continues, with the fund dedicating specialised resources to this effort. The market has been experiencing a gold rush in the real estate sector as even government vowed to underpin NDP-12 on accelerated infrastructure investments. This was revealed by the Economic advisor in the Office of the President, Noma Sephuma. Speaking during an infrastructure and construction symposium organised by Absa Bank Botswana this year, Sephuma said that the upcoming NDP12 was aiming for real economic growth, with infrastructure identified as the driver.
“A key priority area under NDP12 will be the development of appropriate infrastructure – there is a need for a regional and spatial approach to infrastructure development to open up the economy,” she said.
