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Lending and taking security in South Africa: overview

11 May 2016
– 2 Minute Read


What have been the main trends and important developments in the lending market in your jurisdiction in the last 12 months?

The lending market in South Africa has seen renewed activity with a number of private equity buyouts and other corporate action being funded by bank-lending. The roll-out of a government backed renewable energy programme saw a significant amount of activity in the project finance area.

Alternative funding mechanisms (such as the issuance of high yield bonds) continue to grow (in particular in light of the implementation of Basel III) and the lending market will continue to feel some pressure from these alternative funding sources in the near future.


Real estate South African law defines real estate as “immovable property”. There is no exhaustive list of what constitutes immovable property but the following are always classified as immovable property:

  • Land, minerals in the soil, trees (unless in the act of falling) and growing crops of fruit.
  • A building annexed to the land, if its attachment to the land is so secure that separation from it would cause substantial injury to either the land or the building. This includes all buildings or structures with foundations in the soil.
  • An object which is attached to immovable property (for example, to a building which is itself immovable property), if its attachment to the immovable property is so secure that separation from it would cause substantial injury to either the immovable property or the article.

Whether buildings or objects that have separate identity and can be detached with relative ease, without causing substantial damage to the immovable property on which they are situated are considered to be part of immovable property depends on the intentions of the owner. If the owner’s intention was that these objects or buildings should be annexed permanently, they are considered to be immovable property. Otherwise, these objects or buildings (for example, buildings without foundations, such as sheds, railway lines and all fixtures or annexations to buildings) are not immovable property.

Practical Law Multi-Jurisdictional Guide 2015/2016: Finance