Property companies bemoan lack of conducive environment
RESILIENT Property Income Fund says that the levels of bureaucracy and red tape in South Africa have become impossible to deal with, which has forced it to end its South African development operations. The company plans to stop developing shopping centres in the country because of what it calls excessive regulation in the country. It says it will be taking its operations to Nigeria instead.
The red tape had led to falling returns and the length of time required to construct malls is risky and expensive for developers. The company says the state of the local authorities and provincial government departments is of a big concern to it and is one of the reasons it stated publicly that its model of developing non-metropolitan area malls is be drawing to an end.
Another property company, Redefine Properties, shares the same frustrations. It plans to look to Australia and Germany for developments rather than Africa. It says that developments in South Africa hav become impossible. It says that government is not showing the will to get things done, despite the many job-creation benefits of developments such as those it takes part in.