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SA not doing enough to lure foreign funds
Xolile Bhengu / Published:Nov 16, 2007
Businesses looking beyond our borders
South Africans are buying property abroad, but not many foreigners are investing here.
South Africa is missing out on investments because of high interest rates, legislation and crime perceptions.
A recent global survey of 15 markets conducted by DTZ JP Morgan Asset Management found South Africa only attracted 0.2 percent of global invested stock worth 10-billion (R67-billion).
The US, China and UK led with 37percent, 11percent and 10.6percent respectively.
This was revealed yesterday by international and local property experts during the fifth annual IPD/Sapoa conference, themed Globalisation for Growth Conference, held in Cape Town.
Madison property funds manager chief executive officer Mike Flax said the country could not keep up with the appetite for real estate investment.
He said: South Africa is not doing enough to attract fixed investment.
Businesses are looking beyond our borders to invest their money to decrease the cost of business and to gain from yield benefits. But people and businesses must have a thorough knowledge of the market they target for investments.
Experts said of South Africas 150 top investments only eight, meaning less than 1percent, were from foreign investors, which they found ironic because 40percent of JSE investments came from foreign sources.
The industry leaders said although South Africa had to overcome hurdles to attract foreign direct investment it had done well. In the past few months, the US and UK economies experienced a withdrawal from property investments owing to the US sub- prime crisis.
The three-day event attended by those with a vested interest in the property sector said South Africa needed to be more fair in its laws of foreign land ownership, in which the government and unions have called for a moratorium, while issues such as the controversial land restitution process were dealt with.
Flax said: If South Africa attracted global fixed investment it would create much needed employment and be good for the economy.