President Cyril Ramaphosa’s SONA (State of the Nation Address) painted a positive picture of a country on the road to recovery – but there will most certainly be bumps along the way.
In this article, we’ll take a look at some of the key takeaways from the President’s Speech – Eskom, foreign investment, and the development of land – and consider their impact on the commercial property sector.
Eskom – light at the end of the tunnel or dark days ahead?
Of all the challenges facing the SA government, securing the country’s electricity supply is priority number one.
With schedule 4 loadshedding effected throughout the country for almost a week, the reality of Eskom’s continued woes hit home once again. Addressing this elephant in the room, the President laid out his plan to unbundle, restructure, and reinvigorate Eskom.
Although the process is expected to be expensive and may take several years, experts have applauded Ramaphosa’s decisive and detailed course of action on Eskom.
While Eskom’s woes may deter property investors in the short term, local businesspeople should be keen to invest in office space once the restructuring efforts begin to take shape.
Foreign Investors return to SA
In the year since Cyril Ramaphosa took over the reins from Jacob Zuma, foreign investors have shown renewed confidence in South Africa.
In the first three quarters of 2018, the country recorded R70 billion of direct foreign investment – compared with R17 billion in 2017. This significant increase comes on the back of Ramaphosa’s international investment drive, and provides tangible proof that his initiatives are starting to bear fruit.
With foreign investors making up a significant chunk of property buyers in Cape Town, a healthy investment climate is essential for the commercial property sector to flourish in years to come.
New Government Initiatives to Boost Housing
The President announced two major projects in this year’s SONA : the People’s Housing Programme and the Human Settlements Development Bank.
Both of these institutions are meant to increase access to housing by adding new stock and providing construction financing.
While commercial property may not be the main focus of these new initiatives, the development of residential areas will create new opportunities for commercial and retail space.
Overall, the President’s good news SONA has done a lot to calm investors’ nerves – and that presents a great buying opportunity.
If you’d like to invest in commercial property in Cape Town, contact us today. Our area specialists are ready and waiting to advise you.