Africa is expected to attract substantial foreign real estate investment.
According to a recent Knight Frank survey, an increasing number of foreign investors are looking into African real estate markets, drawn by the continent’s impressive economic and demographic growth prospects.
According to Knight Frank’s Africa Report 2015, Africa’s population will quadruple by 2100, with approximately one billion of these people living in Nigeria alone. This is, without a doubt, the most significant demographic pattern that will change the world over the next century. Properties for sale in Doha
Highlights from the report include:
By 2100, Africa will be home to approximately 40% of the world’s population, with the vast majority of these people living in the continent’s fast-growing cities.
Nigeria currently has the largest economy in Africa, with a GDP of $594.3 billion dollars, led by South Africa ($341.2 billion dollars).
Sub-Saharan Africa is one of the world’s fastest-growing economic areas, with 13 of the 20 fastest-growing global economies expected to be in Africa over the next five years.
Luanda, Angola, has one of the world’s highest prime office rents, at US$150 per sq m per month, owing to high demand from the oil and gas sector and a severe shortage of available space.
Story of Expansion
Luanda’s population is projected to increase by more than 70% between 2010 and 2025, while Dar es Salaam, Kampala, and Lusaka’s populations are expected to double. This, combined with strong economic growth, is driving up demand for all forms of high-quality real estate.
As a result of the growth of the urban middle class and the expansion of South African retailers such as Shoprite and Pick n Pay into the rest of Africa, the retail sector has seen a significant increase in activity. Modern shopping malls are a relatively recent concept in much of Africa, but in key cities like Accra and Nairobi, a slew of new malls have opened.
According to Matthew Colbourne, an associate in international research, “Africa’s cities and economies will have a major impact on the global socioeconomic environment in the coming decades. These long-term developments are propelling the development of high-quality real estate across Africa. The emergence of the modern shopping center model in cities like Nairobi, Lagos, and Accra is the most obvious demonstration of this, but there are growth opportunities in all property sectors “ To support Africa’s continued growth story, large volumes of high-quality commercial and residential property are needed, providing excellent opportunities for global funds looking to diversify or join the African market.”
Investing from outside the country
Over the last two years, the growth potential of Africa has resulted in a significant increase in activity involving foreign investors and South African funds.
The involvement of Chinese investors in large-scale construction and infrastructure projects in Africa has been especially notable. However, according to the Knight Frank survey, nine South African-based funds have raised substantial amounts of capital to invest in real estate projects across Sub-Saharan Africa. Over the next few years, these investors will create a flood of modern investable assets that will significantly increase the size and maturity of African property investment markets.
Africa’s head, Peter Welborn, had this to say “In recent years, we’ve seen an increase in interest in Africa from a broader range of foreign investors, developers, and occupiers. The inflow of Chinese investment into Africa has received a lot of attention, but there is also a lot of activity involving investors from other parts of Asia and the Middle East. Meanwhile, a growing amount of capital is flowing out of South Africa and into other African markets.
“While many African countries remain difficult to do business in, there are high-growth prospects for those who can navigate their way through the markets across Africa.”
