Real Estate Investor Magazine South Africa March 2014 | Page 20

NEWS ALERTS

In Property News This Month
The Good

The Bad

The Ugly

Great opportunities for investors

Repo shakes confidence

Fraudulent activity in the market

Following the merger last year between local
commercial brokerage Galetti and the world’s
largest independent property consultancy,
Knight Frank, the new alliance has yielded
positive developments. Knight Frank is
regarded worldwide as the real estate leader
on the African continent and can provide
indispensable local expertise in the form of
advice and knowledge about the nuances
of Africa’s many markets. Galetti Knight
Frank will be hosting a Knight Frank African
Summit in early March, to facilitate valuable
networking between their South African clients
and the Knight Frank Africa heads. With the
expansion and relocation of the Gauteng
brokerage, Galetti Knight Frank is looking to
increase its coverage of Gauteng by employing
more qualified dealmakers while nurturing
existing relationships with its larger landlord
and buyer clients. The further establishment of a
Knight Frank valuations department at the new
Bryanston offices will mean a strong presence in
the three main South African business centres.
Galetti indicates while there is volatility in the
listed property sector for the short term, in
the long term, the fundamentals of escalating
rentals, low gearing, and good quality properties
combined with positive prospects for capital
growth, indicate the sector will perform well
over the long term. For investors looking to
capitalise on the real opportunities this year,
Galetti cites an increased demand in the
A-grade industrial sector. Also, the retail sector
still seems to be trading well and provided the
high targets for expansion evidenced in 2013
remain, there will be a continual search for more
development opportunities throughout South
Africa and the continent.

St uar t Murray, co-founder and former
editor of Finweek stated that: “The half
point increase in the repo rate announced
by the Reserve Bank on 29 January 2014
certainly sent a shock wave through markets.
Sentiment in general had been for the current
five-year standstill in the repo rate to continue
until the end of this year. Only about a month
ago two major banks stated they expected
rates to rise only in 2015.
However, Reser ve Bank governor Gil l
Marcus expressed concerns about the weak
rand’s impact on inf lation, reminding the
public that the bank’s brief is to try to keep
inflation within its target range of 3% to 6%.
The bank now expects inflation to break out
above 6% in the second half of the year and to
carry on well into next year, peaking at 6.5%.
This suggests at most another half a percent
rise in the repo rate maybe towards year-end.
For the property market the interest rate hike
is more of a co