The family of Warren Buffett, the "sage of Omaha" and the second-richest man in the world, worth $43-billion (R300-billion), has started buying property in SA.
His son Howard has bought a 5 000 ha game farm in the Waterberg area, north of Pretoria. The family is also believed to be part of a consortium assembling a number of farms in the Southern Cape, near Cape Agulhas, to create a "big seven" game conservation area. The family's participation in this project could not be confirmed, however.
Is this the beginning of more serious investment in SA by the Buffetts or their main corporate vehicle, Berkshire Hathaway?
Either way, the timing of their purchase in the Waterberg is impeccable.
The latest issue of the estate agents' trade magazine, Property Professional, says prices of game farms and lodges have doubled in two years.
German agents Engel & Volker have opened a Waterberg office and, according to its chief, Alwyn Verster, a fully stocked 1 000 ha farm costs about R4,5-million. A 3 000 ha farm is worth between R10-million and R12-million.
The area is rapidly becoming a new playground for Gauteng's urban dwellers - and international buyers. It stretches from Thabazimbi, through Bela-Bela (formerly Warmbaths) to Vaalwater in the east, and is about 1½ hours' drive on the N1 highway from Johannesburg.
There are already two golf estates in the area, and golfers Jack Nicklaus and Ernie Els are negotiating to buy a 1 500 ha farm that will be developed into a third.
Urban Ocean, the developer of high-end flats in Johannesburg's financial district, will be looking at offering its city-based buyers time-share options at a farm it has bought in the area.
Berkshire Hathaway recently broke from its policy of investing only in US companies, such as Gillette and Coca-Cola, by buying 1% of PetroChina and putting $12-billion into foreign currencies.
Some local businessmen who undertake the annual pilgrimage to Berkshire Hathaway's shareholders' meeting in Omaha, Nebraska, do not see the Buffett purchases as a sign the company will be taking stakes in SA corporations.
Warren Buffett is due to retire next year and Howard will take over as chairman, but Sanlam Asset Management's Kokkie Kooyman thinks he will not be involved in the company's investment decisions, which will be made by the professional managers.
Howard will continue his passion for wildlife and conservation. He aims to turn the Waterberg farm into a cheetah rehabilitation centre and is negotiating with neighbouring owners to integrate their farms into a larger conservation area.
Financial Mail
Publisher: Financial Mail
Source: Financial Mail
