'South African real estate sector must open up'

Pretoria, Dec 23 - South African real estate companies should plan for their future while taking global factors into account, as future competition would come from emerging economies like India, China and the Middle East, a leading property owners' association said here.

'The future is very different from the past, with globalisation playing an increasingly dominant role. We undoubtedly need to open our paradigm to globalisation,' said Marna van der Walt, president of South African Property Owners Association.

'We need to face the reality that our competition of tomorrow will come from non-Western countries including China, India and the Middle East,' BuaNews quoted van der Walt as saying.

'It is up to us, as an industry, to use globalisation to our advantage and for growth,' said van der Walt, who is also the CEO of JHI Property Services.

She said there has been a marked contradiction between the listed property market in South Africa and in the US and Britain. While South African markets showed a growth rate of about 20 percent, the latter markets declined by 20-40 percent.

The local property industry needs to realise that although it has experienced excellent growth in the past, globalisation will start to have an increasing impact on local markets and companies.

She said property is a local asset and operates in an environment that is influenced by global factors such as the sub-prime crisis, credit crisis, currency movements and growth cycles.

In addition, international investors entering the local market have a different mindset and parameters, which also influence property pricing, she added.

She said South Africa has been experiencing excellent growth and continues to be poised for further growth.

'One just has to overcome the problems of poverty, crime, uncertainty in the political environment and legislation such as foreign exchange constraints.

'Further, problems of skill shortages, land issues, absence of a clear real estate investment structure, and infrastructure constraints such as electricity, transport and roads and environment issues need to be addressed,' she said.

'Let's partner with government associations, such as Johannesburg Property Company and Eskom, as well as co-industry players, including property funds and the listed sector, to ensure growth for our property sector in a global market,' she said.

(c) Indo-Asian News Service

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