With Africa’s population set to quadruple by 2100 and economic growth still strong across many countries demand for good quality real estate is on the rise, according to a new report by global property consultant Knight Frank. At these rates of growth, 40 percent of the world’s population would live in Africa by 2100.
Populations of many of the continent’s fast growing cities including the capitals of Tanzania, Zambia, Uganda and Angola are expected to at least double by 2025.
“These major long-term trends are driving the construction of high quality real estate across the continent,”
says Matthew Colbourne, international research associate at Knight Frank.
“Large volumes of good quality commercial and residential property are needed to support the continuing African growth story, presenting excellent opportunities for global funds looking to diversify or enter into African markets.”
For example Luanda, capital of oil rich Angola, has among the highest prime office rents in the world. The demands of the oil and gas sector coupled with limited availability has resulted in high rents that are working to attract developers.
Mr Colbourne notes that there is a rise in demand for modern shopping centre developments in cities such as Nairobi (Kenya), Lagos (Nigeria) and Accra (Ghana), but that there are development opportunities in all property sectors.
While international investment into African real estate is still nascent, overseas investors and South African funds are taking notice of the opportunities this convergence of trends presents, boosting their activities on the continent over the last two years.
Chinese investment into Africa is a well known story, but increasingly other countries in Asia as well as the Middle East have been pouring capital into the region. South Africa is also a notable source of investment into other African markets.
“We have seen rising interest in Africa from an increasingly diverse range of international investors, developers and occupiers in recent years,”
Peter Welborn, head of Africa at Knight Frank, confirms.
Japanese FDI into Africa reached $6bn in 2013 – nearly double the projected number. However, this is dwarfed by flows from Malaysia, which topped $57bn the same year, making it the top investor from Asia into Africa ahead of China.