Dubai: The largest cities of sub-Saharan Africa are growing at a rapid pace; Luanda’s population is forecast to increase by more than 70 per cent during between 2010 to 2025, while Dar es Salaam, Kampala and Lusaka are expected to double in size. Allied to this, Africa’s economies are growing strongly, with the Sub-Saharan region averaging GDP growth of close to 6 per cent per annum over the last decade.
These trends are generating increased demand for good quality commercial and residential real estate across all sectors.
The retail sector has been a particular focus for recent development, driven by the rise of the urban middle-class and the expansion of major South African retailers into the rest of Africa. Modern malls are a relatively new concept in much of Africa, but a spate of new malls has been developed in key cities such as Nairobi, Lagos and Accra.
An increasingly diverse range of international investors have been attracted to the continent in recent years. Chinese investors’ involvement in large-scale development and infrastructure projects across Africa has been particularly eye-catching.
However, there is also growing activity involving investors from elsewhere, including the rest of Asia and the Middle East.
Meanwhile, an increasingly significant flow of capital has emerged from South Africa into other African markets. Our latest ‘Africa Report’ identifies nine South African-based funds that have raised significant volumes of capital to invest in real estate projects across the Sub-Saharan region.
These investors will develop a wave of modern investable assets that will do much to improve the size and maturity of African property investment markets over the next few years.
Many African countries remain challenging places in which to do business, and the continent’s property markets require careful navigation. However, there are opportunities for the development of well-located, well-planned properties suited to local market demand.
The need for high quality real estate will only increase as the economies of sub-Saharan Africa grow in importance on the global stage.
— The writer is the Head of Knight Frank UAE.
