SA land seizure test

FEARS: EXPROPRIATION CASE WILL HAVE RIPPLE EFFECT IN THE ECONOMY

- Roy Cokayne

PANIC. While SA Reit Association's Estienne de Klerk doesn't believe investments will shift away from Reits, he thinks developers may be more cautious about 'sitting on big tracts of land'. Picture: Shutterstock

(Shutterstock)

South Africa's first expropriation without compensation test case will - if successful - have a ripple effect throughout the economy and negatively affect the development cycle, according to property industry stakeholders.

The Ekurhuleni Metro in April 2019 expropriated a 34-hectare property - portion 406 of the Farm Driefontein - without compensation from Business Venture Investments 900, which did not oppose the expropriation but is seeking market-related compensation for it.

Sakeliga CEO Piet le Roux says the business tried to resolve this dispute amiably, but the court has now ordered mediation, which will take place at the end of October, and thereafter an 18-day trial in February next year.

The impact of the test case is likely to be exacerbated if it leads to a failure in SA's discussions with the United States.

These concern a trade agreement and the retention of President Donald Trump's 30% tariff imposed on all imports from SA to the US from 1 August.

In February, Trump said in his Truth Social post that "certain classes of people" in SA were being treated "very badly" and he would cut off funding to the country until the matter was investigated.

Le Roux confirmed to Moneyweb last week that Sakeliga had alerted the US embassy and trade representatives from other countries about this expropriation without compensation.

SA Property Owners Association (Sapoa) CEO Neil Gopal says his association has taken keen interest in the matter but, has not joined the court case.