Real Estate Investor Magazine South Africa December 14/ January 15 | Page 21

upfront

“This is because if a city is growing associated to a specific industry,
you have a significant amount of variables that are uncertain and that
can be affected by global effects, such as drop of a commodity price or
a political or economic crisis on the other end of the world. Instead, if
you focus your investment in cities that have been growing regardless
of the FDI, you will expose your investment to less risk.”
RMB’s report notes that its clients have become increasingly
interested in urban areas as part of their investment strategies,
especially the consumer-driven firms. Some findings include cities like
Lagos, Johannesburg, Cairo, Algiers, Casablanca, Luanda and Tunis
and earmark them as significant contributors to Africa’s overall GDP.

“Real estate organisations will need
to focus on the markets they really
understand, while concentrating more
than ever on the basics of local knowledge
and tenant demand.” - PWC’s Real
Estate 2020 Report
Advice for investors
Head of Commercial Property Finance at Absa, Pieter Steyn,
comments: “With the exponential growth of the African economy
and the opening of its business markets, diversification into African
opportunities should be seriously considered as key element of a shortto medium-term investment strategy. Opportunities for first-mover
pioneers are being snapped up at a rapid rate. Many global companies
wanting to diversify from their home markets are moving in to grab
opportunities on the continent to gain competitive advantage. Each
developer or investor needs to decide their own tactics based on core
strengths, limits, capital and other resources, as well as risk appetite.”
Stan Garrun, MD of IPD (Investment Property Databank) SA,
adds: “There are plenty of opportunities for South African property
investors and developers in the rest of Africa. What has been talk
for years is now tangible reality. More appetite for risk and higher
reward following the GFC has unleashed this potential. With scores
of opportunities for property investment and development arising in
Africa, the next decade could see other African countries developing
commercial property sectors comparable to that of South Africa.
Many international companies, including South Africans, are working
very successfully in Africa, several have been quietly getting on with
it ‘under the radar’. However it is a diverse continent of 56 different
countries and assuming ‘one size’ fits all is hazardous. A strategic
approach, backed by good information and an understanding of what
is happening on the ground is essential for investors. It is not for the
faint hearted or the arrogant.”
www.reimag.co.za

December 14 / January 15 SA Real Estate Investor

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