The City of Windhoek has structured a lease agreement with Grow More Investments CC, a subsidiary of Rani Group, allowing the investor to deduct N$90 000 from each monthly rental payment. This arrangement enables the company to recover the cost of buying two warehouses from the liquidators of the former Ramatex Textile Namibia. The agreement, approved by the Windhoek City Council, covers the municipal land underneath the warehouses.
The two portions of land carry initial monthly rentals of N$173 283 and N$177 685. However, with the N$90 000 deduction, the city will receive N$83 283 for one portion and N$87 685 for the other. This deduction allows the investor to recover the N$8.625 million purchase cost of each warehouse over 95.83 monthly instalments, or about eight years.
Urban and rural development minister James Sankwasa told the National Assembly that the 25-year lease covers the land only, while the warehouses remain part of the investment arrangement. At the end of the lease, improvements to the buildings and surrounding area will become the property of the municipality. The lease will also require the employment of local youth.
The arrangement was considered against factors including economic activity, job creation, investment, logistics and manufacturing. Grow More Investments had argued that demolishing, relocating and rebuilding the warehouses would cost about N$37.5 million per warehouse, in addition to the purchase price.
Sankwasa said the rental amounts will be subject to escalation, with years nine and 10 providing a two-year transition period before the lease enters its next phase. From year 11, the rental will consist of the escalated year-11 amount plus the N$90 000 deduction. From years 12 to 25, the rental will remain at the escalated year-11 level.
The city could not convert the facility into subsidised industrial space for young entrepreneurs in the proposed manner because of legal issues surrounding the development. However, the city will proceed with statutory procedures for a proposed industrial township comprising 157 erven once the long-running legal dispute over the Ramatex site has been resolved.
Last year, parliamentarian Kalimbo Iipumbu described the 25-year lease as treason, emphasising that the government has again disregarded Namibian interests. The government has faced criticism for not transforming Ramatex into a hub for young Namibian entrepreneurs to innovate, manufacture and create wealth.
Key points
- The City of Windhoek leases land to Ramatex investor with N$90 000 monthly rent deduction.
- The 25-year lease requires the employment of local youth and returns improvements to the municipality at the end of the lease.
- The arrangement was considered against factors including economic activity, job creation, investment, logistics and manufacturing.
