Advice and Opinion

Foreign buy-to-let company showing great confidence in South Africa

Bill Rawson, Chairman of the Rawson Property Group, has, along with certain other high profile South African residential property developers, recently spent time in meetings with a group of overseas businessmen whose company already has R2 billion worth of South African residential property on which they collect rents and who are now looking to invest another R3 billion in buy-to-let premises.

“Obviously,” said Rawson, “this was very encouraging because it shows that intelligent and perceptive foreign business analysts still see huge potential in South Africa. We were, in fact, told that they expect to recoup their outlay and profit on most investments within ten years. However the meetings did lead to many of us asking ‘Why are South African companies not doing this as well? Are they not equally capable of seeing the profit potential in this property segment?’”

Actions such as this by big multi-nationals, said Rawson, are likely to lead to fewer opportunities for the small investor – but, as he pointed out three months ago in a public statement, the big corporations are moving into the ownership of multi-unit projects worldwide, usually appointing a local managing agent with definite targets that have to be achieved.

Asked if the market for middle and low cost sectional title developments and gated estates is not in danger of being saturated, Rawson said that right now there is still a huge backlog to be made up – and, with immigrants from Zimbabwe and central Africa now increasing South Africa’s already fast growing population, there will eventually be a massive demand for new low cost housing. As this is fulfilled, he added, it will have a push-up effect on the housing market as a whole, with the more successful occupants of the low cost units moving up the social scale as they progress in their employment.

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