Even the CEO of Growthpoint, South Africa’s largest listed property firm, feels the continent (excluding South Africa) is not for the faint-hearted. Those interested in investing for the longer term, like himself, are likely to remain on the sidelines for now. “We’re less convinced about the dynamics in some of these African countries. It is higher returns for that risk, but we’re not convinced that it’s enough,” says Norbert Sasse, while in London for an investors’ conference organised by Australia’s Macquarie Bank.
“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.