Dear Property Executive
June was brimming with excitement.
SpaceX was listed as the biggest IPO in history as Elon Musk reached trillionaire status on his path to making humans a multi-planetary species.
World Cup fever is running high, and congratulations to Bafana Bafana for making history this past week by reaching the second round of the World Cup for the first time ever.
Fans celebrate sporting achievements—the one thing that tends to unify South Africans.
However, the economy has been slowing down as interest rates have risen, while diesel and utility costs continue to reach record highs.
Dark clouds have been gathering beyond the weather, with the threat of potential violence and xenophobia becoming top of mind as political smoke screens emerge in the run-up to the municipal elections.
The country feels increasingly fragmented, with many foreign Africans residing in South Africa supporting South Africa's opponents and tensions beginning to rise.
The national dialogue has been particularly interesting of late, with many people beginning to ponder what could lie ahead in the coming years and decades.
How can we fix South Africa's problems?
How do the middle and upper classes manage the future?
Will there even be a South Africa as we know it in 10 or 20 years?
Should South Africa, as we know it today, remain one country?
These questions, and many others like them, are important to consider—not only politically, but also socially and economically.
So, what does this mean for the property market, and how does it affect your portfolio and business?
Investment strategy starts with risk management. Property, as the name implies, is fixed to the ground—or is the ground itself.
It is the ultimate form of collateral, but that is also its greatest weakness when governance fails and areas decline or even collapse into lawlessness.
Where you invest matters now more than ever. Spreadsheets and yield calculations don't account for the risk of property loss through expropriation, hijackings by criminal syndicates, collapsing service delivery, or arbitrary municipal billing.
There are three ways to approach this risk:
Accept the way things are and find ways to make them work.
Focus on areas with stable governance, infrastructure, and economic growth, such as the Western Cape.
Plan from the outset for private service delivery to fill the gaps, thereby minimising the impact of governance failures.
Enter the enclave economy, which continues to grow and has shown remarkable resilience during uncertain times.
I had the privilege of visiting Midrand and Centurion this month, where the latter strategy has been implemented on a massive scale at Waterfall City and many other developments in the area.
It highlighted just how important it has become to position your investments and businesses correctly by planning for worst-case scenarios first, then building profitable and sustainable investments from there.
I also spent significant time on the ground exploring opportunities and planning the growth of our Gauteng commercial and industrial team as we continue helping landlords and investors unlock value and identify new opportunities.
Positioning your portfolio for risk mitigation while seeking economically and socially sustainable investment opportunities has never been more important.
We are excited to reveal our new updated website to everyone!
It shows all our services, properties available and can answer many of the questions you might have!
Have a look and we would love to hear what you think!
Yours in Property
Jacques Grove
Principal and Dreamer
