Evidence is growing that Middle East capital is flowing more swiftly into SA and property seems to be the main attraction.

The problem is that Gulf investors have big appetites and most properties on offer are too small to satisfy them.

For instance, Kuwaiti listed property and resort developer IFA, headed by Jassim al Bahaar, bought half of Zimbali coastal resort in Ballito, north of Durban, last November.

The development company has also bought Zimbali Lodge, run by Southern Sun, and will be investing well in excess of R1 billion on a Durban waterfront resort hotel.

Now the Bahrain royal family is looking for opportunities, says David Green, CEO of estate agency Pace, who is consulting to them. "But they are very particular about what they buy. It must be a large, single property investment of well over R1 billion. And there are very few of those around," he says.

Two Saudi investment groups have also approached him for properties.

Green says the investors have "patient capital". They have a high proportion of cash and very low debt, and take a long-term view of their investments.

This new trend has been attributed to the September 11 2001 attacks on New York's World Trade Center and the war on terror.

Analysis of enormous sales of resort properties in Dubai shows that high net worth Europeans and Americans, of Middle East or Indiansubcontinent descent, are moving their capital to places where they feel more welcome.

With increased capital, Middle East developers are moving up the risk curve into Africa. And SA appears to be the choice destination.

Financial Mail