POLITICAL RISK
Property funds find value in SA despite political risk
Despite SA’s economic troubles, the local listed-property sector still offers value compared with those of Western and Eastern Europe, say real estate insiders. Speakers at the South African Property Owners Association annual convention in Cape Town last week said local property professionals were still finding value in the country’s real estate market. However, political interference in the economy has spooked investors, according to Fortress Income Fund CEO Mark Stevens. Political risk had caused economic havoc. "We are in a recession and recent ratings downgrades have prompted investors to buy assets offshore. SA’s government needs to stay out of running much of the economy." It had also been cheaper to develop in parts of Europe where interest rates and funding costs were lower than in SA. Nedbank senior property analyst Len van Niekerk said more than 60% of JSE-listed property funds’ assets were located offshore. Stevens said that over the long term, building high-quality asset...
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