www.chinaview.cn 2005-03-13 16:47:12

 JOHANNESBURG, March 13 (Xinhuanet) -- South African companies setting up shop in neighboring countries are driving up the prices of commercial and residential real estate, thus sparking a regional property boom in southern Africa.

 Sunday Times reported that residential property prices are hitting the 1 million rand (one US dollar equals about six rand) mark in Botswana, and several South African property agencies are exploring partnership arrangements with agents in Mozambique, Zambia, Namibia and Zimbabwe.

 The presence of cellphone networks, mining companies and banks from South Africa has boosted confidence in property markets. And the appreciation of the rand has made properties in neighboring countries more affordable, the report said.

 Gaye de Villiers of Pam Golding Properties, which operates in Namibia, Botswana, Zimbabwe and Mozambique, said the affordable prices and easing political tensions in some of these countries were the attraction.

 Seeff Properties, which opened its office in Gaborone in Botswana two months ago, has also taken over Zimbabwean property company Gainsborough. It is also currently finalizing negotiationsto open up an office in Mozambique.

 And RE/MAX of Southern Africa has set up offices in Botswana, Namibia and Zambia. The gradual change from the leasehold system to the freehold approach more familiar to South Africans is makingthe prospect of buying properties in these countries more attractive.

 Traditionally, vast sections of property in Botswana, Mozambique, Namibia and Zimbabwe have been owned by their respective governments.

 Ownership took effect only through renewable 99- to 999-year leaseholds.

 However, some governments are in the process of reviewing this practice, "a move that has boosted investor confidence."

 Botswana is currently removing leasehold agreements on game parks and some farms.

 David Stone, who heads Seeff's office in Botswana, said many South Africa property investors were attracted to Botswana becauseit had no exchange controls.

 "Foreigners can bring in as much money as they want and when they exit Botswana, they can take out all that money "including their profits ... that is quite unique by African standards," he said.

 The Botswana authorities have also set up an International Financial Services Center which effectively gives off-shore statusto foreign companies operating in the country. This gives them certain tax advantages.

 Stone said these factors had made the country more attractive to do business in, and there was an accompanying increase in the amount of residential and commercial property bought by foreigners.

 But this has made the government wary. The increase in foreign buyers has caused some tension in other countries, too.

 "These countries are very welcoming of investment from South Africa since it often creates jobs and contributes to the economy ... but most of the tensions arise because of the disputes that arise around land claims," said Neuma Grobbelaar, head of the Business in Africa Project at the South Africa Institute of International Affairs.

 South Africa investors are still reluctant to put money into Zimbabwe's residential property market, but commercial opportunities in the country were attractive, said Seeff Properties managing director Stuart Manning, "the commercial property market is very similar to Johannesburg's CBD, where you can pick up commercial properties for a song."

 Estate agents said the demand for commercial property in Zimbabwe had pushed up prices by about 20 percent in December and 10 percent last month.

 Graham Barclay of Ewing & Associates said investors were looking at the potential of buying the properties relatively cheaply and selling later as the market picks up.