That could bring an influx of foreign investment to SA’s office, retail and hotel markets in the next few years.In fact, Johannesburg now ranks among Jones Lang LaSalle’s top 20 global emerging property investment hot spots. Jeremy Kelly, director of global research at Jones Lang LaSalle, said during a visit to SA last week that though the world’s wealthiest investors continued to target superprime office and retail properties in traditional gateway cities like London, Paris, New York, Hong Kong and Tokyo, opportunities were becoming scarcer as capital chased a limited pool of trophy assets.
That is prompting investors to search for real estate investment opportunities in other countries and cities. Direct commercial real estate transactions are expected to increase 13% this year to US450bn-500bn.
Kelly says 30 cities, mainly across the US, the UK, Europe and Australasia, accounted for half of total global real estate investments from 2010 to 2012. He expects global investors to widen their search for property investment opportunities to 50 cities over the next five to seven years. China, India, Brazil, Turkey and SA will be key growth areas, as corporate occupiers and retailers grow their presence in emerging markets. “The world’s real estate investors are bound to follow corporates into these markets,” says Kelly.
Though Africa as a continent is starting to make its mark on the world real estate stage, Kelly says Johannesburg is the only African city likely to be included in the global top 50 cities by 2020. The ranking reflects a city’s desirability as a business and real estate investment hub.
SA has already seen an uptick in foreign investment into listed property stocks, which is set to accelerate now that the JSE has adopted the internationally recognised real estate investment trust structure.
Growthpoint Properties executive director Estienne de Klerk says offshore investors have increased their stake in the JSE top-40 counter from 3% in 2009 to 18% currently.
Source: FM
