Real Estate Investor Magazine South Africa October 2015 | Page 57

and production of oil and gas) and Royal Dutch Shell
signed an agreement to proceed with conducting a
feasibility study into the transformation of natural
gas into liquid fuels, in order to start expediting the
realization of exportation.

“Natural gas resources are a
critical, foundational element
of the economic growth and
development of Mozambique.”
However, the property sector in these surrounding
regions are at the mercy of this sometimes arduous
process, as the E and G companies face many risks in
the political, economic, legislative, taxation, operations
and security spheres.
If these above-mentioned aspects can be dealt with
within a realistic time frame we will see once again
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see the ‘boom’ up North rejuvenate and prepare for
a second wave of mass construction. However, much
lies on essential gas master plans in order to convert
these gas fields into natural prosperity and allow for the
subsidiary industries to grow to full fruition.
Elias Pungong from Ernst and Young, states that,
“The virtual completion in exploration and the future
production activity brings opportunity, not just for
the large international players, but also for local and
regional companies that can contribute to the supply
chains and associated support infrastructure. The
associated development sector brings substantial
commercial opportunities for power generation,
housing, transportation and a range of other facilities
such as; hotels, offices and mixed-use developments.”
Northern Mozambique’s port city of Pemba is a
shining example. Traditionally known as a tourist
destination, Pemba has now become an integral
part of Mozambique’s offshore natural gas industry.
The Pemba Beach Hotel, which eight years ago was
struggling for survival, is now consistently booked
to capacity through the gas companies housing their
workers, due to the lack of available accommodation
resources.
Property developers have spotted this gap in the
market and as a result over the past four years have
rushed to secure prime parcels of available land set for
development to satisfy this need, thereby re-igniting
this once dormant town. It remains to be seen what
2015 holds, owing to the legislative beaurocratic nature
of the Mozambican government to pass sufficient
strategies enabling the LNG process to take shape.
Many developers have been ‘waiting this process out’
from mid-2014, as much uncertainty is evident in these
Northern regions as to the final outcome and when to
progress forward once again.
A projected GDP is expected to increase between
US$50 to US$100 billion in the next decade, which
is being led from gas and mineral profitability upon
smart regulation of the extraction and packaging of the
reserves to international markets.
There needs to be considerable emphasis on
strengthening the financial sector within Mozambique
and adequate institutional arrangements must be made
between local business practices and government
policies, in order to adequately prepare for a successful
stimulation of the economy and to positively affect the
associated subsidiary industries.

RESOURCES
Te Galetti Knight Frank los Group
OCTOBER 2015 SA Real Estate Investor

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