The past few years have seen challenging times for South Africa on the economic, political and social fronts, culminating in the recent Junk Status downgrade. Some commercial property investors are selling SA assets and heading for greener pastures. Others firmly believe that the future looks bright.
Current challenges aside, now may be the best time to invest in SA’s future – if the price is right.
“Be fearful when others are greedy – and greedy when others are fearful”
Keen investors will be familiar with these words, which were made famous by billionaire investor Warren Buffet.
As some property owners sell assets and head for locations overseas, there is a great opportunity to buy commercial property that will appreciate in the future as stock in sought-after buildings and areas becomes available.
Like any investment, buying commercial property in South Africa at the moment comes with its fair share of risk.
How long will SA’s political instability last?
The current political situation and fears about the country’s fiscal management after October’s mid-term budget, have some investors concerned about South Africa’s economic performance over the next decade – and the lower demand for office premises that may follow.
The approaching ANC electoral conference and 2019 elections may give the strongest clues about SA’s economic future. If a pro-business, anti-corruption president emerges to help turn the economy around, growth could increase significantly.
Even at the current low rate of growth, the commercial property sector in Cape Town has shown great resilience – and investors have doubled down on multi-billion Rand developments in the CBD and other areas. These are all excellent signs of solid future growth.
Where to invest for the future
When you choose a commercial property for investment purposes, it’s important to buy in a building and location that will gain in value over the years.
The greater Cape Town area has seen a wave of development recently, with plenty of premium office space available to purchase. If you’re optimistic about SA’s future, the stable and growing Cape Town commercial property market may be the best place to invest.
If you’d like more information about commercial property in Cape Town or would like to view our extensive property portfolio, contact us today.