Despite massive interest in Africa from the global real estate industry, little is being done proactively to market the continent abroad. South Africa's adoption of the new real estate investment trust (REIT) structure means even better prospects for foreign investment thanks to transparency and efficiency in the local market, but South Africa remains massively under represented on the global stage.
According to Tony Galetti, co-founder of Galetti Commercial & Industrial, changing to the REIT structure will really align the local market with international markets, which will hopefully set a precedent for Africa as a whole by providing a working template as the various countries grow their own listed property sectors.
"We believe that growth in the continental African market is going to enter a continued upward growth curve for the foreseeable future and as South Africa leads the continent with the introduction of REIT so, too, will the rest of Africa over time."
A comparatively underdeveloped continent
Africa is still regarded as a comparatively underdeveloped continent, being one of the last remaining regions that can allow for a significant amount of future growth, but actively attracting direct foreign investment in local properties and development remains severely lacking.
Having attended MPIM 2013 last month, one of the largest commercial property conferences in the world, Galetti said that not one South African company had exhibitor representation there: "Galetti Commercial and Industrial was one of only five South African companies even to attend the event.
"It's a serious shortcoming of the South African property sector because we should, in fact, have massive exposure to these conferences from a provincial or national perspective."
The local market is seeing stronger demand for tenants and more construction by developers, which suggests healthy economic recovery. More and more major players within the global commercial and industrial property market will consider South Africa in their investment strategies, but we need to promote this active sector, effectively and deliberately, to them first.