Real Estate Investor Magazine South Africa November 2014 | Page 63

offshore

Where to Invest in Africa
Rand Merchant Bank’s (RMB) fourth annual ‘Where to Invest in
Africa 2014/15 — A Guide to Corporate Investment’ shows a less
favourable year for Africa’s investment attractiveness ratings.
Not only did the continent’s overall investment attractiveness
deteriorate, but 22 countries received lower scores than the
previous year. A small part of the deterioration seems temporary
due, for instance, to the political upheaval in North Africa.
However, the outcome emphasises that the continent still has a
long way to go in terms of reforms if the recent economic boom
is to be sustained.
an apparent shortage of management skills. They have
subsequently opened a new fund, feeling confident that
the Nigerian property sector returns are worth the risk
with the rapid growth of the middle class and inflows
from gas and oil exports.
New players
Previously properties were owned and operated by
the same company but this is starting to change. In
Nigeria, for example, there are shopping centres owned
by individuals or families rather than corporates.
Foreign banks and asset managers are developing the
commercial property market by bringing in investments,
skills transfer and management models. However, it
seems vital for the operations to be managed properly
locally and not remotely, thus certain international
funds have developed strong relationships/JV with
local property managers.
Its vital that underlying properties have stable
long-term returns with good tenants, which is why
some are focused on properties let to large corporates.
Investment grade property is preferable, if available.
There has also been a rise in hotels and tourism in a few
African countries, as well as luxury residential property
and even estates attracting expats returning for work.
The big question is whether the fund invests in
developments or already-operational property (or a
combination of both). There are many advantages
of investing in funds/REITs including trusted
investment and property managers with good banking
relationships, liquidity in REITS, high levels of income
distribution, with lower levels of gearing.
www.reimag.co.za

RMB’s top 10 most attractive investment destinations in Africa
1. South Africa
2. Nigeria
3. Ghana
4. Morocco
5