Africa’s property laws (or lack of)
Africa’s emerging commercial real estate markets may look tempting from the outside, but will remain the preserve of those with the highest appetite for risk.
Even the CEO of Growthpoint, South Africa’s largest listed property firm, feels the continent (excluding South Africa) is not for the faint-hearted.
“We’re sceptical with those African countries further north. Nigeria, Uganda, Kenya, Rwanda etc … you’re never sure if the law protects your property rights. The law around property title is certainly nowhere near as advanced as you would get in South Africa.”
But others are more optimistic. Knight Franks’ head of Africa Peter Welborn told a Reuters Summit in June that Africa opportunities were just as good if not better than other emerging markets such as Asia and Latin America, promising hefty returns.
Growthpoint is the landlord for some 440 commercial properties in South Africa, but owns just two buildings in the rest of the continent, in neighbouring Namibia.
“We’re not unhappy with our properties in Namibia, but we’re not necessarily long-term holders,” Sasse says, adding those were inherited as part of Growthpoint’s past portfolio purchases. Instead, the company is casting its net much further afield to Australia, where he says its new property unit could spend A$2 billion on acquisitions over the next two years.