Windhoek, Khomas -- (SBWIRE) -- 10/13/2011 -- Groot Property Group (Pty) Ltd (GPG) is a Namibia-based premier rapid industrial development and foreign direct investment management company which focuses on implementing applied neuroeconomics and systems dynamic to completely explore, develop, and manage self-sustained ecosystems for the slow-developing and stagnant economies in selected developing countries.
The Company's prime focus is to explore, develop, and manage upscale multifarious rapid industrial ecosystems specifically designed to help improve and fast-track the reduction of poverty and unemployment, address income inequalities, increase economic outputs, improve the quality of life, and strengthen the performance, growth and development of national economies.
"This paradigm is poised to help improve the well-being of people while generating values for our shareholders and partners, increasing profitability, and promoting rapid growth and development," said company Co-Founder, Chief Economist and VP, Development Operations Simon Kapenda. "Added to this is a more fundamental socio-economic impulse which will bring about the spread of integrated and balanced development across geographical spaces. This will be demonstrably expressed in the linkages of urban and rural economies with mutuality of benefits to be derived from equitable growth and development."
GPG's initial multifarious development is Groot Town Center (GTC), an upscale community to be anchored by diverse industries to create a powerful, perpetual self-sustained economic ecosystem near Etosha National Park, Namibia.
GTC will occupy more than 2.2 million square feet (185,800 square meters) of exceptional interior shopping mall and entertainment space, an upper-class town center featuring high with pedestrian-friendly streetscapes, open-air gathering spaces, fountains, children's parks, theme parks, and more than 2,100 best-in-class retails, entertainment, medical facilities, educational institutions, luxury hotels, fine dining restaurants, and office spaces and residential properties.
About 45% of the GTC retail tenants will come from the US, which may include retail finest powerhouses such as: AMC (movie theaters), Game Works, Victoria's Secret, Macy's, Top Tier, Gap, Limited Brands, Foot Locker, Abercrombie & Fitch, Express Luxottica Group S.P.A, Genesco, Zales, Anna Taylor, bebe, Chico's, Christopher and Banks, Lane Bryant, Lucy, New York & Co, Talbots, Aeropostale, Hollister & Co, Hot Topic, Limited Too, Pac Sun, Aldo, Champ's, Easy Spirit, Finish Line, Journeys, Nine West, Payless Shoesource, Hall Mark, Papyrus, Specer Gifts, Wendy's, Panera Bread, Burger King, McDonald's, and many more.
The total budget for the planning, development, engineering and construction of Groot Town Center is US$800 million (N$5.8 billion), which is a combination of 20% of debt and 80% equity financing to come from various lending and institutional investors in the US, Europe, Africa, and Asia.
The Company was founded by a group of distributed team based in the US, Japan, South Africa and Namibia. "Several of our team members have done large scale development work in the past with multinationals and therefore have well-placed contacts with other Multinationals (Global 100), Foreign Government Agencies and Educational Institutions such as the Ohio State University (USA), Carnegie-Melon (USA), Texas A&M (USA), MIT (USA), National Institute of Technology (India), etc. which are waiting for our business structure, co-ordinated plan and government support to be completed," said Co-Founder, VP, Chief Strategist Robbie Jena, an American engineer and Former NASA space rocket scientist whose past experience has been in providing mentoring and strategy services to the Peoples Republic of China in mid 1980's, through China Council for the Promotion of International Trade (CCPIT) and ABB, for double digit economic growth that the Chinese have been successfully using till today to become the world's second largest economy and is now the Architect of the Namibia Master Plan's Ecosystem.
The GTC Ecosystem is comprised of more than 60 different interlocking industrial projects ranging from Transportation Infrastructure, 900 MWe Gas-fired Power Plant, Housing Development, Water and Waste Water Facility, Mini-Steel Plant, Copper Wire and Cable Factory, Oil Tank Farms and Refinery Plant, Small Engine Manufacturing, Food Processing Facility, Organic Chemical Manufacturing, Inorganic Chemical Manufacturing, Glass Manufacturing, Cement Manufacturing, Research Institute, Engineering College, R&Ds, Incubation Center to develop and mentor aspiring entrepreneurs, Medical Health Center, and Pharmaceutical Manufacturing. All projects are planned to be developed in different parts of Namibia within the next 3 to 7 years based on each Namibia's regional comparative advantage.
The use of electricity is directly proportional to the wealth creation of any nation, and Namibia consumes only 3.2 TWh/yr, similar average population size-based countries such as Slovenia and Kuwait consume 13 TWh/yr and 46 TWh/yr respectively. "Just as an Ecosystem in nature will die without Sunlight, similarly, no economic activities will survive without adequate Electrical Power," said Robbie Jena. If approved, by working with the Office of the President, NamPower, Electricity Control Board, and the Ministry of Mines and Energy, we can develop a 900 MWe Gas-Fired Power Plant at the cost of US$1.2 billion which will be financed, designed and built by our partners and a 6000 MWe using cost-efficient and advanced energy technology at the cost of US$1.5 billion (N$11.0 billion), which will be ready for operations within 31 months and 5 years, respectively. This will enable Namibia to export electricity surplus to its neighboring countries at the cost less than their electricity production costs.
A center-piece in the establishment of GTC will be its innate character to be a center of attraction for the concentration of a multitude of essential socio-economic activities with supportive and complementary relationships. "A corollary of this will be applied necessity to mobilize a diversity of professional inputs in areas of engineering, socio-economic research, entrepreneurial development, social services and others," said company Co-Founder and CEO Peter B. Gwarada.
GPG will develop, manage and coordinate powerful economic ecosystems designed to empower and boost economic outputs. "Fundamental in the said economic ecosystem is its capacity to bring about the spatial spread of development across the nation state. This implies economic linkages between the urban and the rural parts," said Prof. Ayele Tirfie, Dr. Ing., an Economist and a leading expert on Economic Regional Development and Consultant with the Ministry of Trade and Industry.
A region is a geographical/physical space in which urban and rural economic activities prevail. The most significant requirement of a partially integrated and balanced transformation of a region or a nation is that diverse components of a spatial system ought to be functionally aligned with one another. More concretely the following must feature high:
- Urban centers of various levels in urban hierarchy must be linked in economic and service functions.
For urban centers to induce development impulses into regions, they themselves need to be interwoven with transport and communication infrastructure both vertically and horizontally between them. This facilitates the mobility of goods, services and workforce between them.
- Functional linkages between the urban and rural parts of a region or a country are fundamental for a balanced development of the region or the country.
- Organizational and institutional provisions are instruments for the integration of the activities of communities and for balanced standard of living in all parts.
- The advantages of agglomeration economies accruing from the concentration of economic and service activities in specific locations like urban centers and deglomeration economies (emanating from the spread of the same activities across space to trigger wide-spread development) must be guided with balance. If not, the alternative would be a costly over over-growth of an urban center and depression and poverty in the hinterlands of the urban center.
It is in the light of the preceding fundamentals that the development drive of GTC ought to be viewed. "The relationship of Namibia's spatial units (urban and rural) is an exemplary case of skewed development landscape in which the urban centers at all levels of the urban hierarchy exist as enclaves with a near-absent links of economic functions to the wider rural space of the nation," added Prof. Tirfie.
GTC intends on changing this retarding reality to a spatially integrated and balanced development dynamics. The following are the steps in the process:
- Creating "localization economy" in which related economic and service entities, with complementary and supportive relationships, will cluster together at common geographical locations (urban centers, villages, and community centers) in order to share common benefits-cum-costs, take advantage of proximity for contact and experiential/commodity exchanges and facilitating overall increases of economic outputs at minimized costs.
- Re-orienting the urban economic and service activities towards the needs of the rural economies both for consumption and for further production.
- Helping promote the rural economic functions (especially agriculture) to competently respond to the urban economic/commodity needs for consumption and for industrial inputs.
- Promoting the production capacity of both spatial units with relevance to each other's needs and creating the functional base for the flow of income in both directions. Each becomes the supplier to and consumer of the other's economic goods and services.
- Avoiding pseudo-urbanization which gives rise to the outflow of potent labor force from the rural part thereby retarding its production capacity, and inflow of rural migrants to the urban center which it cannot absorb with a resultant creation of slums. The likes of this are the squalors in the cities of Nairobi and Lagos. The "push effect" of the rural areas and the "pull effect" of the urban centers create deprivation in the former and increase in poverty in the latter.
- Creating backward and forward linkages in which the existence of an economic or business entity becomes a cause for the creation of others behind it as suppliers of inputs and the establishment of still others as receivers of its outputs for further economic production with added values.
These and other allied development activities not identified here constitute the prime roles of Groot Town Center.
"The ultimate outcome of all will be the spread of integrated and balanced development across the nation state, a revitalized exchange of goods and services within it, and a contribution, in a significant way, to the export capacity of Namibia," said company Co-Founder; VP, Technical Management and Business Development Robert Grier, an American entrepreneur.
The market scope for GTC and all of business-cum-industrial entities it will create will inevitably be not just Namibia with its limited population size but also the various Southern African Development Community (SADC) member countries bordering on Namibia. According to SADC, the 15-member SADC countries have a combined population of over 257 million and an aggregate GDP of US$471 billion (N$5.38 trillion). Added to this will be an inflow of tourists estimated to be about 55,000 per day.
Namibia's tourist industry is growing at an average rate of 13% annually. According to Namibia Tourism Board, in 2008, 981,111 tourists visited Namibia, while in 2009, the number decreased to 980,173, with 73% of them coming from Africa, namely from Angola, South Africa, Zimbabwe and Zambia. German tourists also ranked high in number. Angolan tourists alone spent an average of US$417 million (N$3 billion) in retail outlets in Namibia.
"While we estimate to have a great number of overseas tourists as the prospective patrons for GTC, the majority of GTC customers are expected to come from the SADC region, whose combined population is 257.7 million with more than US$471.1 billion (N$5.38 trillion) (2010) of aggregate GDP and a potential wealth value of more than US$65 trillion (N$474.5 trillion). However still 45% or 116.0 million of the SADC population lives on less than US$2.00 (N$14.60) a day, and only 15% or 21.3 million of them earns annual salaries of more than US$100,000 (N$730,000) with a gross buying power of about US$2.1 trillion (N$15.5 trillion)," said Chief Economist Simon Kapenda.
The development of Groot Town Center ecosystem near Etosha is poised to effect a powerful economic ripple effect to spread throughout Namibia (and eventually to neighboring countries) to create more than 50,000 direct good paying jobs and more than 500,000 indirect ones in Namibia alone within 3 years.
It is also expected to generate an annual cash transaction value of more than US$10 billion (N$75 billion) in Namibia within 3 years (as evidenced in other similar markets), fast track the realization of Vision 2030 within 5 years instead of 20 years, and help reduce the current unemployment rate of about 54% to about 4% within 3 years.
As a result, it will help increase Namibia's GDP (PPP) Per Capita from the current US$4,336 (N$32,520) to over US$24,145 (N$176,259) within 5 years, while boosting Namibia's GDP (real) from the current $9 billion (N$68 billion) (2009) to more than US$54 billion (N$397 billion) during the same years. This is without including the oil tank farm and refinery project to be developed in Walvis Bay for which investment value is more than US$400 billion (N$2.9 trillion).
Since GPG announced its plan to develop Groot Town Center in Grootfontein in January 2010, more than US$9.2 million (N$67 million) has been invested in Grootfontein. US$6.2 million (N$45 million) of that is for Otjivanda Mall by a Namibian developer, US$2.2 million (N$16 million) is a development investment by a South African developer, and in mid November 2010, Woermann Brock opened its US$0.8 million (N$6 million) superstore in Grootfontein.
The GTC ecosystem is a powerful platform which is poised to effect a creation of a powerful economic boost in Namibia. "We expect more and more developers and entrepreneurs, including those who would go and set up fuel stations, barbershops, hair salons, medical clinics, law offices, office spaces, housing and apartment communities and more, to surge in Tsumeb, Grootfontein, and Otavi as a result of developing Groot Town Center in Tsumeb," said Simon Kapenda.
"Also, because of the competitive market, we expect that, whatever we do in Tsumeb, other developers in other parts of Namibia such as those in Windhoek, the developers of Maerua Mall and Wernhill Park (Windhoek's premier shopping malls), will continue to upgrade their services in order to attract and retain customers. Other developers would also copy to develop and maintain almost similar standards in other parts of Namibia and that would help further develop Namibia to realize our goals," added CEO Peter Gwarada.
Going from the premise of the preceding market size and potential, the Company's projected sales values range between US$190 million (N$1.4 billion) and US$1.5 billion (N$11 billion) for the period 2012 to 2015. The net profits during the same period to be derived from the sales values are expected to fall between US$120 million (N$876 million) and US$1.2 billion (N$8.8 billion). Finally, the projected cash flow statement for the period shows net balances between US$12 million (N$87.6 million) and US$1.8 billion (N$13.1 billion).
For the years 2011 and 2012, the Company will focus on the construction of GTC Phase One, which is expected to be completed and opened for the general public in December 2012. It is anticipated that about US$22.2 million (N$162.1 million) will be spent each month in construction of GTC Phase One, starting July 2011 until December 2012.
After Phase One opens, construction of Phase Two will follow with the same monthly budget until it opens in December 2013. Finally, Phase Three will start in the wake of Phase Two and open in December 2014.
"We are certain that based on the Namibia Foreign Investment Act, Namibia has the necessary safe guard to protect foreign investment and hence the interest of our investors," said CEO Peter Gwarada.
We have met with several Ministries and Government Agency officials including the Ministry of Labor and Social Services, NamPower, Ministry of Mines and Energy, Ministry of Trade and Industry, Namibia Investment Centre of the Ministry of Trade and Industry, National Planning Commission, and the United Nations Center for Regional Development (UNCRD) Africa office. All have shown great interest and are in full support of our ecosystem development.
"Ask not what your country can do for you but what you can do for your country," Joseph Auala, company Co-Founder and Chairman of the Board exclaimed the words of the Former US President John F. Kennedy. "As citizens at large, working with our Local, Regional and Central Government and the Namibian people, we want to help accelerate a sustainable economic development of our beautiful country Namibia," added Mr. Auala.
We have an opportunity to develop and implement our rapid industrial development ecosystem which will address most of the current socio-economic issues within 3 years. "This opportunity is consistent with the goals of the Namibian Government, as expressed in Namibia's Vision 2030 and the various National Development Plans by the National Planning Commission of Namibia," said Helvi Petrus, an Economist with the Ministry of Trade and Industry.
"The Government of Namibia, through the Ministry of Industry and Trade's Investment Center, has an Investment Act, which by itself serves as an official instrument that oversees and regulates Foreign Direct Investment (FDI)," said Niel Lakay, Esq., company Co-Founder and VP, Corporate Legal Affairs.
Initially, GTC was planned to be developed in Grootfontein, Namibia and the Grootfontein Town Council had voted to allocate 2000 acres (800+ hectares) of land, however, due to excessive delays in signing the Memorandum of Understanding Agreement (MoU), the Company moved the location to Tsumeb. The Tsumeb Town Council is currently busy identifying the land to allocate it for the development of GTC.
Strategically, GPG has signed different partnership and consulting agreements with some of the world's largest companies based in Namibia, Asia, Europe, South Africa, and the USA.
The Company has contracted Aurecon Group Namibia (Pty) Ltd, part of Aurecon Group Ltd., one of the world's largest engineering firms, which operates mostly in Asia, Namibia, South Africa and the Middle East. Aurecon Group will serve as the Project Management and Engineering firm for the civil, mechanical engineering and construction work of GTC.
DHK (Pty) Ltd, an architectural firm based in Cape Town has been contracted by GPG to handle the urban planning and architectural designing of GTC. GPG has signed an agreement with KMCI LLC based in Louisiana/USA to provide and handle Information Computing and Technology (ICT) services, and is the system designer for GTC.
Leticia Industries Ltd based in West Hollywood, California/USA will handle the development operations of Groot Town Center, while Strydom & Associates (Pty) Ltd, a Windhoek-based land surveying firm, has been contracted to provide land surveying services for the development of Groot Town Center.
What is evident from these and from many of the other analytical contents herein is that the GTC ecosystem will be an impacting socio-economic venture with immense multiplier effects not only for Namibia but also for those further afield within Africa. "The GTC Center itself will be a focal point for agglomeration and localization economies with a potential to create other centers for the selfsame," said Sakeus Kapenda, an Economist specialized in Regional Economic Development with the Ministry of Trade and Industry.
"The development of the GTC ecosystem is designed to be a Public Private Partnership, and we want to work with the people of Namibia, nonprofit organizations, businesses of all sizes, all the Local, Regional and Central Government Agencies to work with us and support the development of this project as it is designed to create good paying and sustained employment opportunities for the Namibian people and boost the Namibian economy," added Robbie Jena.
"We're just little bit more than 2 million Namibians, the city of Harare alone has more than 2 million people. We're a manageable population where every Namibian can realize his full potential. Our country has plenty of land and materials for building, abundant mineral resources to meet any demand for energy consumption, adequate land space to meet consumption demand in Agricultural produce, thus the development of GTC will aid the demand for local agricultural produce to increase exponentially, further boosting economic activities in rural area and beyond," said Olivia Shuuluka, an Economist with the Ministry of Fisheries and Marine Resources.
"Namibians are hard working people by nature, but the country has a comparative disadvantage when coming to high skilled labor. A development such as GTC will require the Namibian Government to invest more and allocate adequate world-class educational institutions to train and produce the next generation of quality labor force in order to meet the demand for a sustained employment," states Lydia Aipinge (Ph.D Candidate), an Educator with the Ministry of Education and is a Company's Advisory Member.
"If we put more emphasis in making sure that every child in Namibia has access to a good education by fully equipping our classrooms, then our children will eventually be able to compete with those in developed countries. We are blessed to live in Namibia, one of the most politically stable countries in Africa, where since independence in March 1990, children have grown up without hearing a gun shot resulting from civil disorder. It is a country with a strong democratic Government with a free market enterprise system where anyone can work hard to achieve his dream and live a life one chooses," said Martha Haufiku, a Primary School Teacher of 34 years at Namutoni Primary School in Windhoek.
"The impact that Groot Town Center will have on local businesses, will be a great improvement in productivity, performance, efficiency, and especially in customer service where each business will compete to be the best and meet the demand for a friendly customer services environment. And as they say, the customer is always right," said Brian Patoko, VP, Chief Marketing and Leasing Officer of Groot Property Group.
About Groot Property Group (Pty) Ltd
Groot Property Group (Pty) Ltd is a rapid industrial development and foreign direct investment management startup company which was incorporated and registered under the laws of the Republic of Namibia Companies Act, 1973 (Act 61 of 1973) on October 29, 2010, registration number 2010/0669. At present, its majority shareholders are its founders, partners, and executive option-holders with 50% of the founding shareholders Namibians, 30% Americans, and the rest from other countries. Learn more about Groot Property Group at http://www.grootgroup.com.
Source: Groot Property Group (Pty) Ltd.
Simon Kapenda, VP Development Operations and Chief Economist
Groot Property Group (Pty) Ltd.
Web site: http://www.grootgroup.com