african property seen as having long term growth potential
News Posted On: 15 December 2009
A report released two months ago in Dubai said Gulf Arab developers were focusing on North Africa instead of 'depressed home markets'. Perhaps they saw the writing on the wall for Dubai World? Now, according to a report from Thomson Reuters Global Property Outlook's annual conference that took place on Friday, experts are taking an increasingly positive view of Africa generally.
Out of four panellists asked where they would invest around $100 million over a 20-year period or longer, three chose Africa as one of the regions.
The three with a long term positive view included Bill Kistler, president of Urban Land Institute EMEA, Jana Sehnalova, the director and portfolio manager at brokerage Forum Securities, and Nick Axford, head of EMEA research at property consultant CB Richard Ellis. Reuters did not name the dissenting voice.
Of the three bullish panellists Nick was perhaps the least enthusiastic, saying that while Africa would yield good returns over the longer term, the development region he most favoured right now was Asia.
"I absolutely buy the longer term story about Africa, but I don't think it's going to happen over the next 20 years, so I would be looking at India ... in terms of a combination of stability with growth," he said.
Bill Kistler cited the globalisation argument as being the major reason why Africa would overcome the demographic and economic issues it currently faces. He told the conference audience of 150 investors -
"There's great opportunity there. I'm not quite sure, however, in which sector, within real estate, to invest in.."
"...(but) you'd have to be very unlucky to pick a reasonably stable country (in Africa) and miss (on making a return) over a 20-year horizon," he said.
Jana Sehnalova also agreed that Africa would be a preferred development region for investment compared to other emerging markets.
"I think you would go through a few heart attacks (by investing in Africa), but at the end you would probably have some sort of profit," she said.
The consensus view was Africa was likely to provide good returns as international capital flows gradually erode the gross imbalance between the first and third world forcing asset price convergence.
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