Stories by Benjamin Umuteme
Abuja
Stakeholders in the African real estate market have said that only stronger regulations and a more consistent policy will attract investment into the continent.
Several large listed South African firms feel African real estate is a long term game hindered by weak laws. They need recourse if something goes wrong.
This was revealed at the aSouth African Property Owners a (Sapoa) conference which was recently held in Cape Town.
Addressing the conference, CEO of Fortress Income Fund, Mark Stevens said it was still highly risky to invest institutional capital in the likes of Nigeria, because property laws and regulatory frameworks were not strong enough yet.
Fortress has invested in industrial property in South Africa and has other investments in Western and Eastern Europe, and is part of a REIT Group that plans to build ten shopping centres in Nigeria, but these have been put on hold.
“We have been unable to spend the money which we raised in Nigeria. The economic policies related to currency control are not conducive to investing for us,” said Resilient REIT MD Des de Beer a few months ago.
“Nigeria is on ice in our portfolio for the time being. We are looking to move our efforts elsewhere,” he said.
For developing market investment expert, Stephen Jennings, many African countries were actually offering very high growth relative to a decreasing degree of political and conflict risk as compared with the likes of Western Europe and the US.
He said many South African investors may have taken their money out of the continent because of push factors without considering strong genuine opportunities in Africa.
Fears abound among genuine real estate operators that high interest rates were also a militating factor to the sectors’ growth as many operators are unable to get funds from Deposit Money Banks (DMBs).
