Real Estate Investor Magazine South Africa May 2014 | Page 50

AFRICA 3. The country needs an open economy Most economists agree that countries with open economies provide more incentive for investment and, in Africa, such countries include Botswana, Zambia, South Africa and Ghana. 4. The country needs a growing domestic product and consumer-demand In order for property-development to remain sustainable in Africa, investors require the comfort of knowing that the micro-economy is set to grow meaningfully over time. The African countries which reflect improved growth potential throughout Africa reflect in the following diagram: A FORMULA FOR PROPERTY-INVESTMENT IN AFRICA Investing within the property-sector of an African country (other than South Africa) is similar, in many respects to investment in South Africa but includes two additional high-level interactions: • Investment in Africa always requires the buy-in and cooperation of government at a national level: therefore, establishing a relationship with the departments associated with trade and property development is imperative to your strategy • Being able to negotiate in the predominant business language of the target company is also of paramount importance. This may require the use of reliable interpreters The remaining steps in the formula for property-investment in other Africa countries remains similar to local investment: • Does the market-demand justify the proposed development • Which property-types will deliver the best land value • Will you be able to pre-let your proposed development to a viable balance between national tenants and sustainable line shops • Is the proposed development broadly financially viable • Does the proposed development comply with the uses of land contained in the existing town-planning scheme or the spatial development plan of the node and region • Does the current zoning of the subject land parcel permit the proposed development or does this have to be materially amended • Are there any geotechnical, mining or soil related impediments to construction upon the subject land parcel • Are there any environmental impediments to construction upon the subject land parcel and does the proposed development meet any environmental control requirements • Are there any community objections to the development of and construction upon the subject land parcel • Will the municipality in whose area the land is situated or will be incorporated be able to provide the required essential services such as electricity, water, storm-water and sewerage • Does your development comply with the requirements of the relevant roads department RESOURCES COURTWELL CONSULTING 48 May 2014 SA Real Estate Investor SUBSCRIBE www.reimag.co.za