City gives Ramatex tenant N$180 000 monthly discount
The City of Windhoek has approved monthly rent reductions totalling N$180 000 for Grow More Investments CC to recover the N$8.6 million purchase price of each of two Ramatex warehouses over about eight years.
Urban and rural development minister James Sankwasa revealed the arrangement in parliament last week, saying N$90 000 would be deducted from the monthly rent of each of the two portions of land leased to Grow More.
Sankwasa said the company would use the deductions to recover the purchase cost of each warehouse, amounting to N$8.6 million, over 95.83 instalments, or eight years.
The minister said the two portions would otherwise attract monthly rent amounts of N$173 283.60 and N$177 685.20, respectively.
After the deductions, the City would receive N$83 283.60 and N$87 685.20 per month.
The arrangement follows a prolonged legal battle over the six Ramatex warehouses. A settlement agreement was signed on 13 September 2023 between the City of Windhoek, as landowner, and the liquidators of the assets previously belonging to Ramatex Textile Namibia.
Following the settlement, the warehouses were put up for sale. Grow More Investments CC, a subsidiary of Rani Group, acquired two warehouses and subsequently applied to the City on 24 April 2024 to lease the land on which the structures stand.
Sankwasa said Grow More argued that demolishing, relocating and rebuilding the warehouses would cost about N$37.5 million per warehouse, in addition to the N$8.6 million acquisition cost.
The lease arrangement also provides for a two-year grace period in years nine and 10, after which the lease amounts are to revert to the prevailing market value. From year 11, the lease amount will be based on the escalated amount plus N$90 000.
The lease covers the land and excludes the buildings.
Sankwasa said all improvements made to the buildings and surrounding area would become the property of the City of Windhoek at the end of the lease period.
He said employment of local youth had also been included in the agreement as a condition.
New industrial area
Sankwasa further said the City had in 2016 developed a layout plan for a new industrial township comprising 157 erven of varying sizes, but the plan could not be implemented because of the protracted legal battle over the Ramatex site.
With the legal battle over, he said the City would proceed with the required statutory procedures to establish the new industrial township.
On calls to convert Ramatex into subsidised industrial space for young Namibian entrepreneurs, Sankwasa said this was not possible in the manner proposed because of legal issues relating to the development.
The minister also rejected the characterisation of the arrangement as putting the facility into foreign hands, saying Grow More Investments CC is a subsidiary of Rani Group and that the majority of the shareholding in both Rani Group and Grow More Investments CC is owned by Namibians.
Sankwasa said Rani Group has more than 56 retail and wholesale stores and eight manufacturing outlets, with a combined workforce of 3 500 employees. He said 30% of goods sold in its shops are sourced from its eight manufacturing outlets in northern Namibia, while other products are sourced from Namibian suppliers and cross-border suppliers.
On a proposal to review all long-term leases of state assets to foreign entities, Sankwasa said he could not commit to such a review because state assets are controlled through different statutory instruments that fall outside the ministry’s ambit.
He said his responsibility is to approve lease applications emanating from local authorities in accordance with the Local Authorities Act.
