Joan Muller

MEANS

Top group ranks SA 23rd among 81 markets

Spin-off from Brics

SA is more likely to appear on the radar screens of international real estate players since the country’s recent inclusion in Brics (Brazil, Russia, India, China and now SA), according to global commercial property group Jones Lang LaSalle

The group recently ranked SA 23rd among 81 markets globally in terms of real estate transparency, positioning SA alongside Switzerland, Italy, Malaysia, Japan, Poland and the Czech Republic.

The Jones Lang LaSalle transparency index compares, among others, auditing and reporting standards, how well listed property vehicles are governed and the efficiency of the legal and regulatory framework relating to real estate taxation, planning and building codes.

Mark Bradford, MD of Jones Lang LaSalle’s newly established SA office, says the country’s well-developed supply of commercial real estate stock could make it a key destination for global property investors, corporate occupiers and retailers over the next 10 years.

SA’s four major cities (Johannesburg, Cape Town, Durban and Pretoria) have a combined office supply of 14,5mm² That’s comparable in size to cities such as Madrid, Brussels and Moscow.

Bradford notes the next decade is likely to see the transformation of Africa’s real estate markets as cities from Accra to Addis Ababa and Casablanca to Cape Town compete to become locations for global business.

Prominent international fund managers including BlackRock, Vanguard, State Street and Principle Global Investors have already started to pour more money into SA’s R125bn listed property market. Estienne de Klerk, executive director of sector heavyweight Growthpoint Properties, says the stock’s overseas shareholding rose from 3% to 11% over the past year.

Increased offshore interest in SA listed property has no doubt been driven by the sector’s stellar investment performance. Figures from the UBS Securities Global Investors real estate index show that SA listed property achieved a total return of 45% (in US dollar terms) in 2010 compared to global listed property’s total return of 24% over the same time.

SA has retained its lead for the year to date with a total dollar return of around 12% in the first quarter of 2011 against global listed property’s 5%.

Source: Financial Mail