Construction World

Africa’s property markets are continuing to develop, despite recent challenges faced by some of its commodity-driven economies, according to Knight Frank’s Africa Report 2017. However, a divergence between the growth rates of commodity-exporting and commodity-importing countries has created wide variations in the strength of occupier and investor activity across the continent.

Highlights include:

  • Africa’s strongest economies over the last two years have included commodity-importing East African countries Tanzania, Ethiopia, Kenya and Rwanda, while the West African economies of Côte d’Ivoire and Senegal have also emerged as star performers.
  • A growing volume of capital is targeted at Sub-Saharan Africa real estate investment and development, with a series of new investment vehicles being launched in recent years. South African funds are increasingly prominent as they seek to diversify away from their domestic market.
  • Rapid population growth and urbanisation are key drivers of property market activity across Sub-Saharan Africa. Its population is growing at a faster rate than that of any other global region and its demographic profile is both young and increasingly urbanised, creating opportunities for real estate development to support this growth.
  • The retail property sector continues to be a major focus for development activity, causing the shopping mall concept to take root in an increasingly wide range of Sub-Saharan cities with Nairobi remaining an important hotspot for development.
  • Francophone West Africa has emerged a new focus for international retailers and developers, having previously lagged other parts of the continent. Increased retailer interest in this part of Africa has been highlighted by the French hypermarket Carrefour’s entry into Abidjan, Côte d’Ivoire. Carrefour also made its debut in the Kenyan market in 2016.
  • Mobile telecommunications have already had a transformative socio-economic impact in Africa by allowing large sections of the population to skip landlines and move straight to wireless technology. This market is only set to grow, which is set to have a huge effect on the growth of online retailing.
  • Off the back of this increased demand the region’s key cities are currently undersupplied for modern warehousing space. Several major logistics and industrial parks are in the pipeline as part of wider urban developments such as Rendeavour’s Tatu City near Nairobi and Roma Park in Lusaka.

 

Peter Welborn, Chairman of Knight Frank Africa, said: “Real estate demand stemming from oil companies and the associated service supply sector has eased in all the African oil-driven markets. Conversely, in the retail sector, the demand across Africa, from the growing middle classes has continued to create a marked increase in activity particularly in the Francophone countries.  This increase in tenant demand, has encouraged new schemes to be proposed; Abidjan (Côte d’Ivoire) providing a really good example as such a capital city where the proposed schemes are supported by offshore investors”.

Welborn said “With the increasing demand for the best commercial and residential accommodation coming from the growing Africa middle classes, there has been an increasing need for developers to raise the quality of the specification in all the new developments”. 

Welborn reiterated that “The challenge for both property developers and investor, is to ensure that the impact and timing of planned infrastructure projects on the growth of their capital city, is fully understood.  The timing and the use mix being a key component to ensure real success.”

Africa rental index

City

Country

Rent per sq m per month

Luanda

Angola

USD 80.00

Lagos

Nigeria

USD 67.00

N'Djamena

Chad

USD 55.00

Malabo

Equatorial Guinea

USD 37.00

Cairo

Egypt

USD 35.00

Libreville

Gabon

USD 35.00

Accra

Ghana

USD 35.00

Abuja

Nigeria

USD 33.00

Abidjan

Côte d'Ivoire

USD 32.00

Algiers

Algeria

USD 30.00

Maputo

Mozambique

USD 27.50

Douala

Cameroon

USD 26.00

Kinshasa

DR Congo

USD 25.00

Addis Ababa

Ethiopia

USD 25.00

Yaoundé

Cameroon

USD 22.00

Dar es Salaam

Tanzania

USD 21.00

Casablanca

Morocco

USD 20.50

Kigali

Rwanda

USD 20.00

Lusaka

Zambia

USD 20.00

Bamako

Mali

USD 19.00

Dakar

Senegal

USD 19.00

Cape Town

South Africa

USD 18.00

Rabat

Morocco

USD 17.00

Johannesburg

South Africa

USD 17.00

Kampala

Uganda

USD 17.00

Nairobi

Kenya

USD 16.00

Antananarivo

Madagascar

USD 15.00

Port Louis

Mauritius

USD 15.00

Windhoek

Namibia

USD 14.00

Nouakchott

Mauritania

USD 12.00

Gaborone

Botswana

USD 11.50

Lilongwe

Malawi

USD 11.00

Tunis

Tunisia

USD 10.00

Harare

Zimbabwe

USD 10.00

Blantyre

Malawi

USD 5.50

Africa Yield Index

Country

City

Yield

Ethiopia

Addis Ababa

6.00%

Kenya

Nairobi

8.00%

Zimbabwe

Harare

8.00%

Botswana

Gaborone

8.25%

Mauritius

Port Louis

8.50%

Morocco

Casablanca

8.50%

Namibia

Windhoek

8.50%

South Africa

Johannesburg

8.50%

Côte d'Ivoire

Abidjan

9.00%

Gabon

Libreville

9.00%

Ghana

Accra

9.00%

Morocco

Rabat

9.00%

Nigeria

Lagos

9.00%

South Africa

Cape Town

9.00%

Tanzania

Dar es Salaam

9.00%

Nigeria

Abuja

9.50%

Malawi

Blantyre

9.75%

Algeria

Algiers

10.00%

Cameroon

Douala

10.00%

Cameroon

Yaoundé

10.00%

Chad

N'Djamena

10.00%

Mozambique

Maputo

10.00%

Senegal

Dakar

10.00%

Uganda

Kampala

10.00%

Zambia

Lusaka

10.00%

Egypt

Cairo

10.50%

Tunisia

Tunis

10.50%

Equatorial Guinea

Malabo

11.00%

Mauritania

Nouakchott

11.00%

Rwanda

Kigali

11.00%

DR Congo

Kinshasa

12.00%

Malawi

Lilongwe

12.00%

Mali

Bamako

12.00%

Angola

Luanda

14.00%

Madagascar

Antananarivo

14.00%

Contact Construction World

Title: Editor
Name: Wilhelm du Plessis
Email: constr@crown.co.za
Phone: +27 11 622-4770
Fax: +27 11 615-6108

Title: Advertising Manager
Name: Erna Oosthuizen
Email: ernao@crown.co.za
Phone: +27 11 622-4770
Fax: +27 11 615-6108

 
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