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