London is increasingly the destination of choice for South African investors

South African investors appear to have shifted their attention to the UK market recently, according to London-based building and construction consultancy Paragon. The firm itself has advised South African firms on investments of as much as R3.38 billion across nearly 30 deals in recent years.

The firm has revealed that One Bartholomew Lane in the City of London is currently set to be purchased by a South African investor, drawing a value of approximately R2 billion. This development is apparently just the tip of the iceburg, given the sea of business that South Africans have brought to the city.

Paragon operates in the domain of commercial real estate, and offers a wide variety of services including building consultancy, project management, project monitoring, cost consultancy and a number of others. The firm has advised several South African firms in recent years.

Hikes in tax rates within South Africa have not only prompted South Africans to move abroad themselves, but has also driven many to shift their profits and investments abroad so as to avoid taxes, although expats above a certain income limit are about to lose out on such an option. 

Last year, the firm advised the South African clients of Oxygen Asset Management through a number of comprehensive surveys. Oxygen eventually acquired Riverbank House for just over R7 billion. This follows from another set of deals that Paragon supported Oxygen with in 2011 and 2013 with two acquisitions, also for parties based in South Africa.

These include a R4 billion (approx.) acquisition of Standard Chartered Bank in 2013 and the Southark headquarters of the London Fire Brigade in 2011 for just over R890 million. In addition, the firm has been involved with the First World Real Estate Fund, governed by South African firms.

According to Paragon, the boom in South African investment over recent years has stemmed from the weakening of the pound and the subsequent increase in the Rand’s relative value. The firm predicts that thus trend will continue in years to come.

Joint Managing Director at the firm John Munday said, “South African investors keep a relatively low profile in the UK, but we’ve worked on an impressive portfolio of assets for them over the years. They’re now looking much more open-mindedly at the whole UK market.”

“There are always trophy asset hunters looking to make a mark in London, and that is an appealing approach for some. But we’re also seeing many South African investors being hungry for new opportunities and asset classes all across the UK and in every sector,” he added.