COMMERCIAL property lending is critical to stimulating the development of infrastructure in South Africa, one of the key pillars in the National Development Plan (NDP).
Gary Palmer, chief executive of Paragon Lending Solutions, says there is a growing need for small to medium businesses to continue to invest in commercial property because it is vital for economic growth.
Economists forecast 2.8% economic growth for South Africa next year.
But Palmer says the key to meeting and enhancing long-term economic growth is for businesses to invest in infrastructure development projects.
“The improvement of roads, railways and transport nodes, as well as meeting demands for better operational facilities will have a positive impact on development in South Africa.â€
Of the R827-billion allocated to infrastructure over the next three years, the government has allocated R430billion to schools, hospitals, clinics, dams, water and electricity distribution networks, as well as improving bus, commuter rail and road links.
Finance Minister Pravin Gordhan also notes that infrastructure transfers have risen sharply from R4.8-billion in 2005/06 to R39.7-billionlast year.
Palmer says that while the government works towards transforming infrastructure, commercial property investors play an important role in developing property off the back of the NDP’s infrastructure programme.
He says the additional benefits of new developments give businesses greater impetus to grow and positively contribute to the employment rate. “There also are longer-term benefits where businesses can attract investment, and can expand… into new growing regions, where access to their services has been lacking, such as in rural areas.†– Staff Reporter
