DOWNGRADE CONCERNS
Property chiefs fear political risks
Growthpoint Properties and Old Mutual Investment Group’s MacroSolutions bosses fear that possible policy changes would affect investor sentiment in a sluggish economy
The bosses of SA’s two largest locally based real estate companies are becoming increasingly concerned that political risks have increased in SA recently, placing pressure upon a sector that is trying to perform in a sluggish economy. Estienne de Klerk, MD of the largest locally based listed real estate group Growthpoint Properties, said rumours of a Cabinet reshuffle that could potentially see the removal of Finance Minister Pravin Gordhan and the growing possibility of a sovereign ratings downgrade for SA would scupper Growthpoint’s local development plans. "We can only control certain things and cannot anticipate all market shocks. We have to be cautious. There has been increased political uncertainty recently. Investors hear that the government could make policy changes or changes to its executive, which can affect their sentiment," said De Klerk. "While we continue with our current local projects, there has been a downturn in demand for longer-term leases, especially in the off...
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