Real Estate Investor Magazine South Africa August/September 2019 | Page 5

EDITORIAL VIEW JOHANN RUPERT How investment & rejuvenation of SA’s inner cities can drive growth, employment and housing Government entities such as; Eskom, SAA and SABC are getting bailouts. Private sector enterprises including Edcon and African Bank are being bailed out through the Public Investment Corporation (PIC). The construction industry and aligned real estate development industry is collectively experiencing tough times. The construction industry has particularly challenging times emanating from the pricing collusion of the 2010 Fifa World Cup contracts. Most of the big-name construction companies such as; Group Five, Basil Read, Stocks and Stocks, and Murray & Roberts are still battling to survive. These construction companies have been downsized, cut jobs and have been forced into business rescue. The only company thriving is Wilson Bayley Holmes-Ovcon (WBHO) who despite experiencing skills exit are still the best performing construction company. An exit of skills through emigration and the diversification of investor funding into offshore assets in stronger currency and lower interest rate environments has been a key determinant of investor sentiment. Although the construction boom has stalled and there are fewer opportunities, locals and investors are advised to consider the existing opportunities in retrofitting older buildings for private investors. These buildings have the potential to be converted into affordable residential accommodation in Johannesburg, Durban and Cape Town. The City Johannesburg has a huge inventory of old expropriated buildings in the CBD which are derelict. These buildings are an opportunity for investors to transform these structures into lucrative residential property. This can result in upliftment of the CBD, generate employment opportunities and create longer-term returns. I believe that the current market is in a depressed state an there is a surplus of untapped potential for investors to make a fortune. The real estate sector works in cycles and the cycle is at the bottom right now. It is definitely not a time for investors to drop property as an asset but rather an opportunity to capitalize on the downturn in the market with the many opportunities to take it on a medium to longer growth trajectory. It might be an opportunity to pile into these opportunities while everything is cheap. Successful investing NEALE PETERSEN EDITOR-IN-CHIEF Job creation is on top of the agenda with the latest figures reaching an agonizing nearly 30% unemployment rate. It is critical for SA to address this as a matter of urgency. We need to restore confidence back into the economy and private investors can fuel this growth. We need market friendly opportunities with limited red tape and a sign that declares we are really open for business. Banks need to have finance readily available to those with the appetite and skill to turn this around. This can also attract much-needed foreign investment. EMAIL [email protected] INTERVIEWS tv REItv ABIGAIL JOHNSON “ No matter how senior you get in an organization, no matter how well you’re perceived to be doing, your job is never done. FaceBook LIVE “ T he real estate investment and construction sector in South Africa are experiencing multiple challenges mainly as a result of tough economic times, red tape and an exit of skills out of South Africa. Due to mismanaged State-Owned Enterprises and corruption, most macro chal- lenges have gotten worse and thus negatively impacted public finances. REAL ESTATE RADIO PodCasts SA Real Estate Investor Magazine AUGUST/SEPTEMBER 2019 3