Local development opportunitie

Local development opportunities are there, if you’re willing to take them

One of the country’s most active property development firms debunk a few common misconceptions about doing business in South Africa and the potential for growth as well as the positive role government is playing in boosting the industry.

Local development opportunitie

Look, there’s no doubt that doing business in South Africa can be a challenge for some. That said, there are companies out there who have taken our unique challenges in their stride and grown into successful examples of what a proudly South African business can be.

MSP property development is exactly one such company, with a broad portfolio of affordable housing solutions tailored for the local market, as well as folks who’d like to invest in property from where they are abroad. These folks have built thousands of homes, so if there’s anyone who knows what they’re talking about it’s them.

“We specifically operate within the affordable housing segment of the residential market and we are recognized leaders in this field. We have been operating in this market segment for more than two decades and therefore the institutional knowledge that we have accumulated, now stands our clients in good stead,” said CEO Riaan Roos.

Riaan Roos

Roos admits, however, that there are challenges facing property development and construction industry; but adds that, as with everything else, there’s always an upside to be found.

“It is becoming increasingly difficult to deliver a truly affordable housing solution given the inflationary pressures to which we are exposed. State controlled inflation such as the increasing cost of electricity affects all our base costs – from the materials we use through to the labour force. When energy costs soar, it is understandable that our work force’s expectations of their annual salary increase will also soar.

It is not all doom and gloom though. Inflation can be both a friend and foe. For those who already own property, inflation is a close friend since it increases the replacement cost of the property and therefore also its market value. Inversely, if you do not as yet own property then inflation is a determined adversary.”

Now, while it’s easy to jump on to the government-bashing bandwagon and unburden yourself of some of the responsibilities of building a successful platform in SA; Roos has a refreshingly positive and balanced view of the role government plays in the development industry and the challenges faced by both.

“In South Africa’s historical context our government has to juggle many and varied demands for fiscal support. Although these demands are not unique, the magnitude of it is somewhat overbearing when weighed against the limited scope of the government to increase its revenues – especially in the current economic climate. As a result one can understand if the government does not have the means to properly support private developers and developments.

Having said that, there are a number of indirect ways through which the government supports residential development. The foremost amongst these are the provisions of Sections 13 and 39 of the Income Tax Act. These provisions offer investors in new residential developments a method to significantly reduce their taxable income and consequently it is a core driver of demand for new developments,” said Roos.

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