Investment in SA real estate a good bet, says veteran

Posted On Thursday, 19 May 2016 20:23 Published by
Rate this item
(0 votes)

While SA offers the best real estate investment opportunities in Africa, investors need to focus on funds that have strong property fundamentals.

 Imraan_Suleman_Arrowhead_Properties

Property industry veteran Frank Berkeley says while SA offers the best real estate investment opportunities in Africa, investors need to focus on funds that have strong property fundamentals amid difficult market conditions.

Many South African investors have chosen offshore property stocks over local stocks during the past 18 months, as they seek hedges against a weak rand, and are also attracted to companies operating in faster growing economies than SA.

Berkeley was the keynote speaker at a real estate industry update presentation held by advisory and auditor firm KPMG yesterday.

He is recently retired, having spent more than 30 years in real estate.

“If I think of African property markets, SA is currently the best and safest bet. While people may worry about policy certainty, corruption, and political stability, SA is actually quite stable.

“Our financial systems are reliable, we can get money in and out of the country and so on. So, while there are opportunities elsewhere in Africa … right now I feel there are many opportunities in SA,” he said.

Berkeley said there was strong demand for residential assets in Cape Town that offered one such opportunity. “More people are moving to Cape Town than ever before. There have been spikes in the number of people looking to retire there and also student accommodation is in tremendous demand.

“Residential property has become a popular investment for listed funds and I can see a lot of activity happening in Cape Town,” he said.

Berkeley said, however, investors needed to be circumspect when it came to choosing South African property stocks.

This was because some stocks were far overvalued relative to others. “We’ve found that yields are too close for many property firms, as investors have not looked enough at the underlying assets and quality of the management at various funds and then valued stocks inaccurately,” he said.

Berkeley said a number of funds were looking overseas for opportunities, but they did not necessarily know enough about those markets.

In a separate interview, Arrowhead Properties chief financial officer Imraan Suleman said investors needed to note that many offshore deals would initially be earnings accretive for South African funds, but the funds would then have to look for more acquisitions to keep up their enhanced distribution payouts.

source"Business Day

Last modified on Thursday, 19 May 2016 20:40

Most Popular

Growthpoint begins construction of the Kent residential apartments in KZN

Aug 26, 2021
Marius Els, Development Project Manager at Growthpoint Properties
Growthpoint Properties (JSE: GRT) has commenced the development of Kent, its first…

On Auction: Iconic Redevelopment Opportunity in Oranjezicht Cape Town

Aug 26, 2021
The_Lenox
Currently operating as a 43 room guesthouse / backpackers.

On Auction: Spacious offices with multiple amenities in Norwood

Aug 26, 2021
Default Image
Spacious offices with multiple amenities on Auction in Norwood.

On Auction: Retail & Offices Property with unutilised bulk in Rivonia Johannesburg

Aug 26, 2021
KTM_Building
The anchor tenant is Road Adventure Dirt (Pty) Ltd (RAD) which is the premier KTM…

On Auction: Commercial Historical Building in Cape Town

Aug 25, 2021
Cape Town Commercial Property for Sale - 3 Church Street
436sqm Commercial building comprising of retail and office space.

Please publish modules in offcanvas position.