The value of cultivated lands differs from area to area, because the production potential differs. The production potential is determined by numerous factors.
Game farms and ranches become more and more important to the agricultural sector. Values / ha differ vastly for many reasons.
A Lodge on a game farm can be valued by capitalising the net income or by applying the depreciated cost approach.
Exotic game can be very expensive. It is usually done on a small area of 50 ha to 100 ha. It is more like a feedlot than a game farm.
A house is easily over valued on a game farm. A house on a farm is usually of less value than the same house in a town.
Infrastructure are for example boreholes, water provision for the game, game fence & farm roads.
The value of Infrastructure is embedded in the value of the land. Thus, it is not added additionally.
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With the valuation of a game farm, the value of the building structures is added to the value of the land to calculate the total value of the farm.
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Game is normally not included in the value of a game farm, it is a loose asset. It can be included on the specific request of the client but it must be valued and stated separately in the valuation report.
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The quality and configuration of the game fence influence the value of the game farm, because it determines the game species that can be kept on the farm.
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Closeness to another large reserve such as the Kruger Park, Timbavati, Sabi Sand, Klaserie, etcetera - increases the value of a game farm materially.
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More factors that influence a specific game farm's value:
3. The farm shape and outlay. Narrow long shapes are not preferable
4. The extent
5. The location
There are factors that influence a specific farm's value:
1.) The access to the farm. How easy or how difficult is it to reach the farm.
2.) Right of way servitudes. It is a real nuisance if there is a right of way servitude
More reasons why game farms differ in value / ha
3.) Presence of Malaria ( foreign visitors often prefer malaria-free areas; thus, the value / ha is higher)
4.) Veld types differ. Sweetveld areas are usually higher in value vs sourveld areas
Game farms differ in value / ha for many reasons, some are:
1.) Grazing carrying capacities differ.
2.) Relative distances to other game reserves have an influence
Prerequisites for a game farm:
3. There must be secure and safe drinking water for the game, even in times of a severe drought.
4. Fire breaks are critical to prevent and control fires.
The availability of enough grazing at all times is essential
Prerequisites for a game farm are:
1. It must be game-fenced all around, with 2.4m height fence of acceptable configuration
2. There should be no internal cattle fences which prohibit the game to roam freely.
What makes it a game farm?
The bushveld cattle farm with free-ranging game on, is not a game farm.
The karoo sheep farm with springboks alongside the sheep, is not a game farm
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Game Farm vs Wildlife Farm
A Game Farm is a smaller intensive wildlife production unit that is fenced on which wildlife is managed intensively for the production and harvesting of marketable game products
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For a capital intensive business, as well as a business with a high investment in working capital (debtors and inventories), future free cash flow should be used.
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