Commercial Property in South Africa: Investment Opportunities and Benefits

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Buying commercial property in South Africa for investment purpose is one of the most commendable ways of generating income. Both domestic and foreign buyers appreciate the versatility that the South African property market has shown in the past few years. According to the Economist, the demand for commercial real estate in South Africa has gone up by 400 percent in the past 10 years, which is the highest in the world. The rising demand for offices by new business enterprises and growing number of foreign investors are two key factors driving this appreciation of price of commercial real estate in South Africa.

Investment Opportunities in South Africa

The commercial property investment in South Africa has almost outperformed the European and American markets. According to estimates made by Research Worldwide, commercial real estate investment in the country had given an annual return of 15 percent when the rest of the world was tottering due to recession. The country continues to be a leading manufacturing and export hub for African, Asian, and European markets. The liberalized economic policy and growth in major urban areas, such as Pretoria, Johannesburg, and East London, has created perfect ambience for investment in South African commercial real estate.

Investors have plenty of option to buy or invest in commercial properties of various shapes, sizes, and prices. It includes office blocks, intricate industrial complexes, retail outlets, apartments, and shopping malls. New concepts, such as serviced and instant offices, make the opportunity for investment more attractive. The low-rate of interest offered by the banks also adds to the already huge potential for real estate investment in South Africa for both foreigners and natives.

Benefits of Investing in Real Estate in South Africa

The economic growth in the last decade is the foremost reason for considering the rainbow nation a chosen investment destination. The government patronization to new business ventures has led to influx of many foreign companies and emergence of domestic business ventures in various fields. As a result the demand for commercial places, particularly the offices, have increased giving a new fillip to commercial property prices. The tourism industry and the fast growing internal market also contribute to make real estate investment in South Africa a lucrative option.

Substantial state support is a big advantage for commercial property investment in South Africa. Developers pass a major part of 20-percent tax break given by the government to buyers. In case of renovation projects, investors can also avail of similar tax breaks. Low exchange rate of the local currency Rand against Euro, Pound, and Dollar help investors get more value of their money. Zero stamp duty and minimum levies on property also a big plus to buy and sell commercial property in the country.

Above 95 percent occupancy level illustrates the high demand for commercial property in South Africa. With the economy going strong and European multinational preferring the country as an investment hub, the demand for commercial real estate is set to increase further. The country's proximity to developed countries and trade pacts with developing powers is going to fuel growth in this segment of national economy. Political stability and its role as African financial backbone is sure to benefit the commercial real estate development in the country in the coming days.

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