Real Estate Investor Magazine South Africa October 2014 | Page 61
OFFSHORE
We asked 6 of the speakers at the upcoming Africa Property Investment
Summit to highlight the greatest challenge currently facing property
investors in Africa and how this challenge can be met.
Gerhard Zeelie
Head: Real Estate Finance - Rest of Africa
Standard Bank South Africa
Rapid urbanisation and growing consumer
wealth on the African continent is providing
numerous opportunities for investors
wanting to gain exposure to retail and office
property developments north of South Africa.
The greatest challenges for property
investors would be access to cost effective
funding, and the rapid changes in the
regulatory environments in Africa.
Investors should be partnering with financial
institutions that have experience in Africa and
are positioned to understand the dynamics of
doing business across the continent.
Paul David Simpson
Director
Delta International Property Holdings
Ltd
Kevin Teeroovengadum
CEO
Atterbury Africa
The opportunities open to property
investors in Africa are substantial and as
big as anything available or predicted to
be available anywhere on the planet, the
challenge is, understanding the markets and
gaining the confidence which is borne of this
understanding.
To achieve this you need to understand your
customer and get a confident grasp of the
risk and reward potential.
With 53 countries forming the continent
you cannot regard them as being all the
same. Equally, it can be a mistake to think
that everything about Africa is mysteriously
and fundamentally different to other parts
of the world.
Debt funding remains an ongoing challenge
as there are very few banks that are willing
to consider property finance in multiple
African jurisdictions.
Pricing on US$ debt facilities is still high
despite the fact that the US$ Libor has been
the lowest ever for the last five years. All-in
pricing still remains in the region of 8% to
9% for new developments despite the fact
that significant up-front equity of around
40% to 50% is required from investors and
high pre-let targets greater than 50% prior to
debt drawdowns.
With time, banks - especially local ones
as they grow - will see that there is an
opportunity for them to play a more active
role.
Join us at the Africa Property Investment Summit to tap into the expertise of these speakers and many other experts who will share their
knowledge, insights and experience in property investment in Africa.
DATE: Monday 13 & Tuesday 14 October
VENUE: Johannesburg, Sandton Convention Centre
TIME: 07h30 – 17h00
BOOKINGS: www.apisummit.co.za or [email protected]
www.reimag.co.za
October 2014 SA Real Estate Investor
61