The 28-year-old Otto hit 14 of 14 fairways to set up eight birdies, leaving the field coughing in his dust as he blazed into a five-point lead early in the day and held onto it until the close of play.
Players are awarded eight points for an albatross, five for an eagle and two for a birdie. A bogey or worse costs two points.
It was Ottos first competitive round since he withdrew with a back injury during the second round of the 2003/04 season-ending Tour Championship at Leopard Creek in February.
Former champion Warrick Druian will begin the second round will the smallest deficit to make up, after his six-birdie, one-bogey round of 67 earned him 11 points.
Zimbabwes Sean Farrell and two-time Sunshine Tour winner Nic Henning share third place with 10 points.
Ross Wellington and Simon Hobday finished the day in a share of fourth position with nine points, with a four-strong group that includes Titch Moore one point further adrift.
Otto cited a strong performance with the putter on what he called perfect greens for his place on top of the pile.
The greens as perfect as they are, if you hit it on line its going to go in. I had six one-putts today, which helps a lot. said Otto.
Otto confessed to being pleasantly surprised with his performance, which bodes well for his return to European Tour action in two weeks time at the prestigious Deutsche Bank-SAP Open.
Obviously you arent expecting too much when coming back from such a long break, but I hit my irons close today and it worked out well, said Otto.
Id love to leave here with a win but Im looking at the bigger picture. Ill just be trying to keep it like this over the coming weeks and take this form to Europe.
Impressions of course officials and players alike after Tuesdays practice round suggested that scoring would not come as freely as it had done in previous years.
But with cloudless skies helping to dry out a course that has seen ample amounts of rain over the past four months, and flags limp with the absence of wind, the birdies flowed thick and fast.
Farrell helped himself to six of them and added an eagle three on the 17th after stopping his second shot 3 feet from the flag to take the early lead with 10 points.
According to Farrell, his place among the contenders fell to the modified stableford format, which he said rewarded the aggressive player.
This format definitely favors aggressive play, said Farrell. You can really go for it, which means more birdies and more bogeys, but you wont lose ground if you keep the birdies coming.
I only shot 2 under, but scored 10 points, so it was like a 5-under round.
I made four bogeys and one double today, so Im looking to tighten it up a bit tomorrow and keep those off the card.'