Kalyan, who is set to address South African audiences at the 9th Annual IPD Property Investment Conference on 28 and 29 July 2011 at the Westin Grand Hotel in Cape Town, explains that investors, having digested their losses in the global financial crisis, are starting to get on the front foot again and actively look for strategies that allow them to benefit from these dynamics.

Aptly themed ‘Expanding Horizons’, the conference is presented by Investment Property Databank (IPD), the global leader in property investment benchmarking, in partnership with the SA Property Owners’ Association (SAPOA) and sponsored by Old Mutual Property.

“In the previous cycle we saw a lot of developed market institutional investors look to diversify geographically, typically with indirect investments in similar economies to their domestic market,” says Kalyan. For instance, UK pension funds would put a small allocation into Europe.

According to Kalyan, this trend is growing. “We are still seeing investors more willing to diversify in a genuinely global manner – looking at an indirect allocation that is moving into emerging markets in AsiaPac and into the US.”

“This means that they still believe in the diversification argument and are willing to take it to its logical conclusion,” says Kalyan.

“It’s a welcome sign.”

She believes that the South African real estate market has a lot of potential and should benefit from that move to true globalization of portfolios. It is a good thing that South Africa is being grouped with the BRICS acronym markets – Brazil, Russia, India, China and South Africa. But we need to make much more of this on the PR front to be seen more visable.

Kalyan explains that while many global markets are not just post-recessionary but actually seeing really strong growth, such as Germany and Sweden, investors are still cautious given the potential for a continued US housing market slump and the problems emanating from the fiscally challenged European countries. 

“To this end, we are still seeing investors targeting prime - highly visible, highly resilient – cashflows,” says Kalyan. “Only in a very few markets are we starting to see investors willing to move up the risk curve and take a ‘refurb-release’ value-added play to take advantage of an expected rental recovery.”

This may reflect the fact that debt markets are still impaired.

With credit less available than in ‘typical’ post-recession upswings, Kaylan is adamant that it should come as no surprise that we aren’t seeing typical post-recession investor behavior.

“Strategic insight from across the country, the globe and the property market will be in generous supply at the conference to inform prudent property investment strategies and decisions,” says Stan Garrun, managing director of IPD SA.

The conference will focus on eight essential topics for property investors, including: property cycles; global capital flows; real estate investment trusts (REITs); legal issues; residential investment and social housing; operating costs; property market data; and fund management.

Joining Kalyan is international speaker Arnoud Vlak of IPD Netherlands. South African property sector specialists speaking at the conference include renowned columnist Max Du Preez, Andrew Brooking of Java Capital, Rob Wesselo of International Housing Solutions; John Loos of FNB Commercial, Wayne van der Vent of PIC REAM, Craig Hallowes of Pangbourne Property, Keillen Ndlovu of Stanlib, Rael Levitt of Auction Alliance; and Marius Muller of Pareto.

Muller points out that in addition to global dynamics, operating costs are key challenges for the local property sector right now. “South Africa has to look towards the future management and containment of property costs, particularly in terms of rates and taxes, utilities and also, to a lesser extent, pressures on wage increases, to ensure continued growth of the sector,” says Muller.

Another test on the horizon locally, according to Muller, is the greater transparency required in terms of the disclosure of transactions between landlords and tenants. “It is important to employ appropriate measures to facilitate the industry evolution to be compliant with new legislation, which requires an overhaul of transparency in the sector,” says Muller.

For more information on IPD visit www.ipd.com.
To register for the conference contact: This email address is being protected from spambots. You need JavaScript enabled to view it. or 011 280 6633