Real Estate Investor Magazine South Africa December - January 2014 | Page 58

ACQUIRING

BY ISELLE MCCALMAN

Game Reserve Properties
Where are the opportunities?

S

outh Africa’s future hinges on developing land
use options that are socially just, economically
viable and ecologically appropriate. Balancing
these components is difficult to accomplish, even
under ideal circumstances. Privately-owned protected
areas have in recent years emerged as innovative
and powerful engines for sustainable development.
Mounting evidence strongly suggests that privatelyowned conservation areas can protect biodiversity,
succeed financially, and contribute to social upliftment.
Research shows that financial constraints are
the biggest challenge in developing reserve areas.
Negotiating and purchasing land from local
communities tops the list of obstacles to future
developments. Furthermore the cost of building high
quality infrastructure - especially in remote areas and mounting a significant marketing effort before
any revenue is generated, are major considerations.
Nevertheless, the number of privately- owned
game reserves and conservation areas has increased
considerably over the past 10 years and with it the
opportunity to own land within a game reserve,
whether it be freehold, fractional or timeshare.

This poses some questions
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Is there a risk of too many small private game
reserves serving the owner’s financial interest
at the expense of conservation and thereby
diminishing the investment value?
What is the investor appetite for buying property
within these areas and what are the risks?

Speaking to conservation specialists it is clear that,
although all attempts at rehabilitating farmland into
game reserves are to be welcomed, selling off pieces
of land for people to build on places a continued
strain on the environment in terms of water resources
and the natural movement of animals. So, unless
these properties form part of a bigger reserve and/or
the development density is managed, it could do as
much harm as farming activities.
When looking at investment opportunities
in game reserves it is therefore important to
analyse the various el ements such as size of the
property, owner/developer credentials, land claim
settlements and sustainable conservation practices
amongst others.
Unfortunately developments in general have a
bad track record with investors as many are badly
managed or simply run out of money and end up
being skeletons dotting the property landscape,
taking investor money along. Game reserve
developments are even more prone to the dangers
of financial woes and land claim issues.
However, investor interest in game reserve
developments seems to remain strong, although
qualified. Owning a piece of the “Big 5” African
bushveld still seems to be the ultimate lifestyle
investment, and if it can be combined with social
and conservation considerations, it makes a lot of
financial sense.

December January 2013/4 SA Real Estate Investor

A good example of a successful conservation and
land rehabilitation project is the Mjejane Game
Reserve bordering the Kruger National Park and
Crocodile River. Forming part of the greater Kruger
Park conservation area, Mjejane has a proud history
of community co-ownership. As part of one of the
largest community land agreements ever in South
Africa, Mjejane has been developed in a joint venture
between local developers Safrican and the Mjejane
community.
Not only is this 4000 hectare property successfully
fulfilling community expectations, it is also involved
in an ongoing farmland rehabilitation project.
Hundreds of hectares cane and citrus farmland have
been bought up and incorporated into the main
reserve, thereby providing additional permanent
employment opportunities. The land for sale
within the game reserve has been carefully selected,
considering the balance between environment and
development. As acknowledgement of this model
project, the reserve now has direct access to the Kruger
Park via a private bridge on the property.
In conclusion it can be said that buying property in
game reserve developments, whether it be freehold,
fractional or sectional title, remains a popular choice
for investment portfolios. It certainly is sustainable,
on condition that the credibility of the development is
carefully assessed.

RESOURCES

Rainmaker Marketing

www.reimag.co.za