FOCUS ON INVESTING OVERSEAS South Africans are buying all over world

Residency, nationality rights attract

MORE than half the world is open to wealthy South Africans wanting to invest in property outside the country’s borders.

Not only will they safeguard their wealth, in many cases buying property abroad comes with access to residential and even nationality rights for the entire family. This is particularly true of destinations in Europe and the Indian Ocean.

According to Pam Golding Property Group chief executive Andrew Golding, South Africans show an ongoing appetite for investment in global property to diversify their portfolios, gain access to sought-after lifestyle options, and achieve a rand hedge in times of economic uncertainty.

In addition, they are often able to secure residence or citizen status and create international opportunities for their children to study, live and work abroad.

Theo Petersen, of Seeff Mauritius, says Indian Ocean destinations such as Mauritius, the Seychelles and Zanzibar offer an additional incentive for property investment: subject to certain regulations, South Africans get a property allowance to invest in SADC countries over and above their annual foreign investment allowance of R10 million (R20m for a couple), and the R1m discretionary allowance that South Africans can take out of the country.

Petersen points out, however, that the property allowance can be used for only one property.

London has long been an attractive city for property investment among South Africans, thanks to the country’s economic stability and steady rates of return, but there are other pockets of value.

“Steadily growing economies, twinned with greater affordability and strong yields, have contributed to their strengthening investment case,” says George Radford, director of Africa for the property investment firm IP Global.

The company’s latest biannual report, the Global Real Estate Outlook, analyses the viability, performance and future potential of cities in terms of residential property investment.

New cities that attracted the report’s attention last year included the European capitals Lisbon and Stockholm, and Berlin, Frankfurt and Dusseldorf in Germany. Their booming economies, rising populations and house prices have made them compelling investment hot spots.

Radford says real estate investors from sub- Saharan Africa, Ghana and Nigeria have always been interested in UK property .

He says: “On a global level, London, Berlin and Chicago remain very popular due to their stability and growth potential, but we are seeing increased interest from sub-Saharan African investors in regional UK markets such as Manchester, Liverpool and Birmingham, and other key European cities which have been traditionally overlooked by the market but are thriving. Investors looking for greater returns over a five- to 10-year time horizon have turned their attention further afield.”

He says the trend has been for South Africans to purchase buy-to-let international residential properties for diversification and capital protection purposes, as well as income- producing assets, because they are more tangible than other property investments, such as property funds.