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Commercial office buildings in the central business district of Harare, Zimbabwe’s capital. Image: BloombergSince Zimbabwe is where you are from, can you share some insights on that market broadly? I know it’s a very broad question, but it seems there’s a bit happening there, despite Zimbabwe’s well-reported economic challenges.
“And that’s been increasingly valuable because it now trades exclusively in US dollars – we now have a market that circulates US dollars amongst itself – so what you get for US$100 000 in Zim can’t be compared to what goes for R1.8 million down here in South Africa. “Some guys have made money in mining or commodities or what have you, and they’re looking for a store of value.”
“But you have a number of large but unlisted property developers, more likely on the land-development side because, from an affordability and access point of view, selling a stand for 20/30/40 000 dollars is a lot more realisable and achievable than selling apartments for 100/200 000 dollars. “Funnily you bring it full circle. I’m standing in Braamfontein at the very moment, and this is where I started. I came down in 1994 as a student to do a BCom in real estate at Wits.
“Indeed. I was at Leapfrog – as an executive director and shareholder, and I ran the commercial division. So I was the CEO of the commercial division, not the whole group, but invested in the whole group. “We’re all urbanising as quickly as we can, and that’s going to be the state of Africa – highly urbanised. the state of the residential market, we’ve seen South Africa where you sit on the data and you talk to the Lightstones and what have you, we are flat on capital growth. The yields have been under pressure because costs are rising faster than income is rising. So that’s difficult.
“So all of those deals that you’re talking about were probably originated out of the likes of Standard Bank or RMB, who went aggressively – and in a commodity upswing and boom it looks easy to say, oh look, the dollars are there. “The best thing I would imagine is to have a matching, where you raise local money in local currency, and then you’ve got that kind of matching. So whatever’s happening locally, the rates may go up and down and you can have monetary interventions that kind of protect those flows. But if you’ve pegged it to the US dollar I think you’re going to have a challenge in an African economy that’s so dependent on commodity exports.