Investing in the Greater Kruger Park
PUBLISHED 17 DEC 2019
The Greater Kruger Park is a sought-after area for various reasons. Firstly, the area has the famous African “Big 5” being elephant, lion, leopard, rhino and buffalo. There is also a rich supply of fauna and flora in this region. Secondly, the area is limited to only around 2,000 properties. Globally this is a small number compared to other property types such as coastal. As an investor, it means becoming an owner of property in the Greater Kruger Park is prestigious, rare and dare we say it, even high status. Not to mention the pleasures that come with it, such as the game viewing and a sense of being at one with nature. Thirdly, the fences between all 2000 properties have come down, allowing all the game to roam freely and vegetation to run its natural course. Not only is this important to preserve the natural habitat for the area but it also increases the demand to invest in these areas. Therefore, buying into these areas means that you will be one of the 2,000 custodians of this remarkable African Big 5 area. This article will discuss the value of investing into the Greater Kruger Park as well as being a part of preserving the natural areas of the loved African landscapes.
The limited number of properties is met with high demand. Properties do not easily become available and when they do, the owners have the ability to seek out the best offer through marketing by professional estate agents.
As established Estate Agents in the area, we have seen that the above-mentioned factors mean that prices are not always aligned to the rest of the South African or global property markets. While prices maybe going down, in these areas they are increasing.
Because of these reasons mentioned above and as an established estate agent of the area, we have noticed that these prices are not always aligned to the rest of the South African or global property markets.
After all, these areas are one of a kind in all aspects. The future of our planet and expansion of urbanization means that these properties may become priceless in the future.
Over my many years in the Greater Kruger Park areas, I have seen the value of Big Five property portfolio value grow ten-fold. Perhaps you may say I’m giving my age away, but certainly growth has exceeded most other asset types. From my personal conversations with property owners, they preferred to invest in their property by either developing their properties or buying more properties, rather than putting their money into other financial vehicles. What we have observed as estate agents of the area, is that when investing into these types of properties, your investment is always going to cost you a premium due to the demand, but your returns will outweigh your initial investment. Other than the monetary value and investment gain, the Greater Kruger Park properties also allow for owners to have the opportunity to keep our wildlife heritage alive. As mentioned, these fragile environments may not be commonly found in years to come because of urbanization.
Just like the variety in vegetation and animals, there is also a variety of property and investments types in the Greater Kruger Park. When identifying what you want to invest, one must consider these questions;
1. What is my budget?
2. What size of property am I looking for?
3. What is the use for the property? It can be for private use or commercial use.
The Greater Kruger Park accommodates for all levels of investment:
If you have a larger budget to invest, one should consider property in Klaserie, Timbavati, Thornybush and Sabi Sands. Whereas smaller budgets would consider Balule West, Parsons, Grietjie, and share blocks such as Ntsiri, Ingwelala, Ndlopfu, Jejane or Olifants.
Investing in the Klaserie:
Klaserie is one of the largest privately-owned nature reserves in South Africa covering 60 000 hectares. The area is a non-government organization which is involved in the full spectrum of Nature Conservation. This year has been marked as a very significant year as the Klaserie has celebrated its 50-year anniversary. Properties normally range from 500ha to 1 200ha. Commercialization is new to the Klaserie as it was only introduced in the last ten years. Klaserie is an awesome area to invest in, if you are wanting to start your investment in the lower end of the market. Klaserie properties range from R20m upwards of R60m.
Investing in the Timbavati:
Timbavati is a highly sought-after private reserve in the Greater Kruger Park. Buying property here in the Timbavati is extremely rare. The reason for this is because landowners purchase the farms before it becomes available to the public through a process of the first right of refusal. This showcases the property owners’ views of the reserve and area. More than anyone they know the rarity, value and uniqueness of what they have. Recent sales in the Timbavati have shown values of R60 000,00 to R70 000,00 per hectare. These prices are justified as the Timbavati is smooth-running private reserve whose owners are predominately captains of their industry. Timbavati is renowned for many 5-star commercial lodges and has become marketed from a tourism perspective worldwide.
Investing in Thornybush:
Thornybush has recently dropped fences with the Greater Kruger Park. This allows greater movement of game including the Big Five. This, will most likely result in the prices increasing. Thornybush is renowned for its internationally visited “Thornybush Collection” which is a portfolio of commercial luxury game lodges. The market value of property in Thornybush is around R60 000 per hectare upwards.
Investing in the Sabi Sands
Within the field of tourism and eco-tourism Sabi Sands have put South Africa and the Greater Kruger Park on the map. Open game vehicle safaris, African sunsets and leopard photography are synonymous with the Sabi Sands. Due to its excellent game viewing, and well recognized brand, Sabi Sands prices are of the highest in Greater Kruger. The market values for Sabi Sands can be expected to be R100 000-00 per hectare upwards. While this seems outrageous, the investment return is high, and many landowners are satisfied with their outcome of investment. The biggest property sale in South Africa comes from Mala Mala, a neighboring reserve which borders Sabi Sands and was sold in the region of a billion Rand a couple of years ago.
The above areas in the Greater Kruger Park are the higher end of the investment spectrum. Other options do exist within Greater Kruger which are a lower capital outlay, and yet still very popular. These include smaller properties, in some cases 21 ha or in share blocks.
Examples are Balule West, Parsons, Grietjie, and share blocks such as Ntsiri, Ingwelala, Ndlopfu, Olifants North and South and Jejane.
Investing in Balule
Balule is a management region of around 40,000 ha and within that you get smaller managed reserves, such as Grietjie, Parsons, Balule West, Olifants North and South.
These reserves are popular for private use and commercial lodges are restricted and capped to the current level. The property sizes ranging around 21ha properties, and in some instances around 11 ha, but can also be larger. These properties are big enough for dedicated game drive routes which allows you to view Big Five animals. In these areas, with these sizes, the market values are priced from R2 million for vacant land up to R 20 million for an exciting lodge / bush home. Share blocks have greater traversing areas and a limited number of shareholders who own the reserve. Balule can be found just north east of Hoedspruit leading up to Phalaborwa.
Investing in Share block properties.
A share block is a structured way for owners to own a reserve and have their own dedicated home and yet have financial ringfencing from their other assets and investments. A share block is an excellent lock up and go form of buying. There are various share block options in Greater Kruger Park, such as Ntsiri, Ingwelala Ndlopfu, Jejane, Olifants North and South.
This is a great way to experience Greater Kruger as all these properties have professional management. Traverse on these properties range from 2,500ha and can be as large as 10,000 ha in the case of Olifants. When buying into a scheme one can either own 100% shares in a home, or shares in a home that give you limited usage of that home. These types of schemes range between R4, 400 000-00 up to R15 000 000-00 for a full share.
For more information on Big 5 properties please call me to discuss. Most of my sellers I deal with are private. Hence, we do not market the properties on our traditional platforms as we are asked to be very discreet.
I presently have a number of high valued properties on our books, such as 5-star commercial lodges and private farms looking for new owners.
You can contact me on firstname.lastname@example.org or on 082 906 7004