The fact that a Chinese company has committed itself to R80 billion worth of development in Gauteng is encouraging, but it has to be recognised that a great more effort and a radical change in outlook are essential if overseas investors’ confidence in South Africa is to be fostered at a high level.
Bill Rawson, Chairman of the Rawson Property Group, made these comments recently after discussions with potential European property investors.
“With the exchange rate now so heavily weighted in favour of the First World and the stronger Third World economies,” said Rawson, “we should be seeing strong inflows of investment. Although all too often I, for one, come across a wait-and-see attitude, a holding back mentality – and this simply has to change.”
Rawson said that property developers and marketers like himself are not really qualified to advise those in power how to bring about an increased confidence in South Africa, but, he said, for the record, the factors which he has found time-and-again that deter possible investors are:
1. The proliferating crime throughout South Africa, which in some areas has become ‘almost out of control’;
2. Widespread corruption, not just among small state office holders but also among top ranking people such as police chiefs;
3. A deep ‘fear-laden’ suspicion in government circles of overseas capital and the profit motive coupled with a mass of inhibitory legislation, all of which has to be worked through before the investor is given the go-ahead.
“By contrast, African countries such as Rwanda and Mauritius with good tax and other incentives actually make it easier for overseas and for their own investors to become established in their countries.”
4. On-going strikes, regardless of the economic conditions of the companies being targeted.
More effort & a change in outlook needed if overseas investors’ confidence in SA is to be fostered at a high level.http://t.co/ggsMGATR2F
— RawsonPropertyGroup (@RawsonGroup) November 21, 2013“What we all now fear is that others, less adaptable than the Chinese, will follow BMW’s example and put their investment elsewhere.”
Currently, said Rawson, the South African property development sector is giving very satisfactory returns and is ripe for on-going mega-developments of the kind suited to big international investors.
