Real Estate Investor Magazine South Africa May 2014

COMMERCIAL management systems for a large property portfolio. Although the enterprise lacked management expertise, the ownership was open to implementing new processes aligned with our local systems and using our local technology. What my Australian flight-mate was benefitting from was Africa’s shift away from reliance on primary-sector activities (such as agriculture and mining) towards second-sector and third-sector activities such as retail goods and the supply of services. This trend is linked to the South Africa driven retail property-development formula which we have seen being rolled out in recent The macro-formula for successful investment in Africa – and, more pertinently, successful property development – is probably best defined as follows: 1. The country needs to be a democracy. This helps to stem corruption in general and cronyism in particular – although these are still an ever-present risk throughout Africa and need to be avoided and managed carefully The following diagram provides an indication of African democracies: years: funded by an South African bank (which also acquires a presence in the development), one of our national retailers anchors the shopping centre and between fifteen-to-twenty line shops (some of national branding) tenant the centre. An office component is also a possibility. There is, of course, no reason why our industrial parks (including mini-factory developments) could not be replicated in African countries as well. And, as commercial activity throughout Africa continues to expand, so housing demand shall increase, followed by a requirement for social service infrastructure. 2. The country needs a developed banking system Although Africa’s banks are, on average, less efficient than world-wide, they remain more prof itable and operate in less competitive environments than other, more - developed countries. The following diagram assists in indicating the countries in Africa which have moved significantly towards mobile banking, an indicative factor of the increasing advancement in banking systems within Africa. The dark and light blue coloured countries represent democracies while the beige and brown coloured countries represent hybrid or authoritarian regimes. www.reimag.co.za REALE ESTATE BUSINESS DIRECTORY May 2014 SA Real Estate Investor 47

Real Estate Investor Magazine South Africa May 2014 | Page 49