Property investors should immediately “re-engineer” their investment strategy and focus on property yielding short-term results rather than placing the emphasis on long-term profits or volumes, says Norman Raad, chief exectuive Broll Auctions and Sales.
Raad says: “It’s time for investors to make the most of what they own, get rid of the excess and concentrate on what they need, not what they want. For years, ‘more’ was everything, but now it’s time for increased selectivity to protect cash flow.”
He believes some properties are now undergoing “normalised correction” but still offer great long-term value.
“However, some properties are virtually obsolete with demand non-existent, so alternate use and conversions would be a wiser - and the only option.
“As 2020 begins, we have already seen significant movement in the property sector - more consolidations and more prudent decisions indicating this year will bring less procrastinating and more decision-making.”
Raad says last year was an extremely difficult year with load shedding, corruption and unprofessional behaviour rampant.
“Real Estate Investment Trusts were battered last year as property prices plunged because of rent reversions, and company collapses, as demand lost the battle against supply.
“The property sector had enjoyed the longest and most profitable run since 2003, so perhaps change was inevitable. Property is still an ideal investment. Just don’t expect the compounded escalations and growth experienced over the past decade,” he cautions.
* For Broll’s first major multi-property auction of the year in Joburg on February 19, the offering will include the expansive Olympia Equestrian Estate, on the Old Blanco Road on the outskirts of George, near Fancourt Golf Estate, on the Garden Route.
Raad says this multi-event property has “unbelievably massive development potential”. For more details about the estate and the auction’s online bidding arrangements, call Ryan Ciapparelli on 0823016886, email [email protected] or see www.brollauctions.com.