Fear of land reforms still lurks in the minds of some property investors

The damage that the Zimbabwean land reform blitz did to property investor confidence in Southern Africa is something which he has to deal with once or twice a week, says Bill Rawson, Chairman of the Rawson Property Group.

“I want to make it clear,” said Rawson, “that I support land redistribution. I genuinely believe that it is an essential part of the rectification of previous wrongs – but it has to be emphasized again and again that a fair way must be found in which to facilitate this. I have to warn all those responsible for action in this field that land or property grabs without compensation are a signal to the international business community that it is time to beat a retreat.”

Many potential buyers, but especially those from overseas, said Rawson, ask him just how likely property grabs could become in South Africa.
“My invariable answer,” he said, “is that expropriation has not taken place so far. Although there have been threats to do this if willing buyers and willing sellers cannot accommodate each other. Residential, commercial and industrial property by and large has been unaffected and property owners here are left secure in their ownership. I am therefore inclined to think that those who govern our country – and our economy – are aware that the right to own property in perpetuity is the cornerstone of any free economy and that it will be very damaging to our economic prospects to embark on any major land reform projects other than those in the agricultural sector.”

The perception that land reforms are damaging, said Rawson, is particularly true here in South Africa where the defining financial institution, the JSE Securities Exchange, is largely in the hands of multi-nationals, many of whom are in no sense wholly or even partially South African.

“A large portion of the money in the JSE Securities Exchange and in government bonds is not South African. If you encourage foreigners to place their money in business ventures in your country, you also have to grant them the privilege of owning property here – and by property I mean not just industrial property.”
Rawson commented (as he has done on previous occasions) that a good sphere in which to initiate a genuine land reform would be thousands of hectares of state land, much of which is unoccupied or totally unproductive but often on strategic sites.

“We are told that the state has no single register of all the property it owns. They have, however, started to find out what property they own but, as I understand, it will still take a few years before this is finalized.”

The big advantage of starting with state land, said Rawson, would be that it could be taken over at a small or no cost. Ideally, he added, private enterprise should be involved as a partner to the state in the provision of business nodes, industrial premises, communal facilities, landscaping and the like.
“It is recognized that certain companies do this far better than others. Let us identify and use them, if necessary on a fixed fee or transparent profit sharing basis so as to prevent excess profits being made.”

Article by: www.rawson.co.za

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