MasterYak

"We change at the speed of pain." CNN's Richard Quest threw that line at a plenary in Sun City last month, in a room filled with South Africa's top economists. The occasion was the South African Property Owners Association's (SAPOA) 60th annual convention, and the people listening were the landlords, developers, lenders and fund managers who own and finance a large share of the buildings this country works and lives in. Quest's point was that South Africa usually waits until things get bad enough before it fixes them. With local government elections on 4 November, most delegates wanted to know how much more pain property owners must absorb before change arrives. Professor Adrian Saville of the Gordon Institute of Business Science (GIBS) set the tone with a keynote that didn't sugarcoat anything. South Africa has been stuck at roughly 1% economic growth for about 15 years. Back in 1980, production sectors like mining made up around half of our economy. Today they make up less than a fifth. Saville called our economy "hollowed out" and added that income per person is now lower than in 2010. Anyone who owns property knows a building earns money only if someone pays to use it. Offices need companies that are hiring, and flats need tenants with jobs. When an economy barely grows for 15 years, demand for space grows slowly too, and so do rentals and values. Saville told the room that SAPOA members sit at the centre of South Africa's growth engine. If the engine stalls, the buildings feel it first. Read the full article on below.