Cresa MD Guy Voller says there are prospects for the government to assist the property industry by ensuring approvals for large capital investment projects are timeously achieved.
The Washington DC-based Cresa is credited with being the world’s largest occupier-only commercial real estate company and Voller heads up the South African operation.
“There are various real estate investment trusts (REITs), property developers and investors making sizeable capital commitments in South Africa this has driven a more creative approach to brownfield projects including rejuvenating older buildings and precincts.” Voller says the local property market has experienced a long bull run and the recent downturn hones focus on unlocking value.
But he believes a significant challenge to the sector is re-investment into old central business districts where decentralisation has led to empty buildings in undesirable zones.
While this will require “careful consideration”, various major projects to repurpose redundant, derelict and vacant office space are rejuvenating complicated parts of CBDs and not exclusively by private sector investors either.
Various commentators believe this year’s MTBPS will be the most continued significant half-year update since the practice was introduced in 1997.
In an economy strangled by escalating unemployment, pitiful growth rates and spiralling public sector spending on wages, interest repayments on government debt and bail-outs for monolithic state-owned enterprises unable to operate profitably, Mboweni’s options will be both tightly restrained and tightly watched by the market and potential investors.
The announcement has been delayed by a week to accommodate international commitments by both Mboweni and President Cyril Ramaphosa.
“In previous, more stable post-apartheid years, the MTBPS was largely an understated affair with a few tweaks made to the budget. The entire process aims at ensuring maximum budget transparency (something for which South Africa has been renowned) and provides an overview of income and expenditure over the next three years. It was a process built on painstaking number-crunching within the national treasury,” says Wits School of Governance visiting fellow Judith February.
The Bureau for Economic Research chief economist Hugo Pienaar says the MTBPS reflects an adjustment of government spending based on current economic conditions and, while it does not propose major changes to spending or introduce new taxes, it signals whether or not South Africa will meet the targets laid out in February.
He says it also provides the government with an opportunity to reprioritise spending. During the 2018 MTBPS, the government announced it was reprioritising more than R32 billion over the threeyear cycle towards infrastructure, housing subsidies and other needs.
Absa Corporate and Investment Bank senior economist Peter Worthington says: “It is not possible to turn up growth by simply flicking one or two easy policy switches. Many of the structural reforms needed to lift South Africa’s growth rate – selective privatisation, labour market liberalisation and educational reforms – are politically challenging … however, an MTBPS that sets out a viable and convincing path for fiscal consolidation is a first necessary step towards fixing South Africa’s economy.”