Friday, November 23, 2007

South Africa: Lack of Stock 'A Snag, Not Foreign Investors' -

Nick WilsonJohannesburg

THE South African commercial place industry demand not be too concerned about growing foreign investing in the sector because there is enough local investor involvement to maintain it buoyant, place economic expert Francois Viruly says.

The more than of import challenge for South African commercial place participants is to happen new marketplaces because of the deficit of supply of quality place stock in the local arena, he says.

This gives rise to the inquiry of whether the move to other marketplaces will affect investing in place in developed states or in developing markets.

One of the subjects of the 5th yearly place investing conference hosted by commercial place association Sapoa and Investing Place Databank last hebdomad was the issue of growing foreign investing in SA's place sector.

Viruly states what emerged as the conference, which was held from Wednesday to Friday, progressed was that the local commercial place sector necessitates to happen more than place stock.

"The South African place sector have the equity from investors. Bash we really necessitate that much more than equity from abroad investors? What we necessitate is a larger marketplace and if we can't turn our economic system substantially, the (commercial property) sector will look elsewhere. The inquiry is, make we travel to developing states or the developed world?

"I came to this conference with the thought that we should seek and acquire foreign investors here, and now I am leaving with the inquiry of where we should be going."

Viruly states South African listed place outputs have got fallen significantly over the past few old age with some listed place finances trading at outputs of below 5%.

With foreign listed place companies trading at similar yields, it do buying involvements in these abroad companies more affordable.

"I believe the other argument at the conference, and I believe the point was made a few times, was should we be looking into other marketplaces locally? Geographically, where make you go?

"Unless this economic system can begin growing at 7% to 8%, you run the hazard of investors saying this game is too little and looking to travel on and put in other markets," Viruly says.

Catalyst Fund Managers place analyst Alice Paul Isadora Duncan states although he holds investors will begin to look additional afield for investing chances purely because there is value in a batch of abroad markets, offshore marketplaces make not suddenly offer "boundless chances without risk".

"It is not as easy as people believe to simply get assets in Africa or eastern Europe. Looking at the more than developed economic systems such as as the US, Asia and cardinal Europe, these marketplaces are well established with important participants already well established," Isadora Duncan says.

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The South African listed place marketplace houses only about 15% to 20% of the country's commercial place assets as opposing to 80% inch Australia, he says.

This connotes there is possible for additional growing in the listed place sector from local place sources.

"If we could just acquire to about 40% of SA's commercial place assets, the listed place sector's marketplace capitalization would be approximately R200bn, which is about the same size of the listed place marketplace in Capital Of Singapore and one-half the size of Japan's."

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