2017 is promising to be an exciting time to invest in Africa’s real estate market.
Whilst there are always challenges and risks associated with any real estate investment opportunity, the real estate market in Africa is still seen as a very smart investment that can deliver a very good income stream to anyone taking advantage of the numerous opportunities available.
China is a major investor, in fact over 70% of all Chinese direct foreign investment is currently being made in African cities, with numerous investors taking advantage of the opportunities whilst they are still available.
Investors from Russia, Turkey and India are now also becoming major stakeholders in the real estate market across Africa, keen not to be left behind by China.
The size of both the middle and upper classes in Africa are continuing to grow, this in turn is driving the housing market as the demand for affordable, high-quality properties becomes overwhelming.
There are opportunities across the whole of Africa however there are five cities across the continent that are showing exceptional growth, and therefore proving to deliver the highest return on investment, these are; Lagos in Nigeria, Accra in Ghana, Kigau in Rwanda, Nairobi in Kenya and Luanda in Angola.
The population of Lagos, already Nigeria’s largest city, is the fastest growing in the whole of Africa. This is ensuring that the demand for both commercial and residential properties is continuing to grow year on year.
Over 4 million of Ghana’s 27 million population live in Accra, and with Ghana considered as one of Africa’s most politically stable countries, the demand for residential and commercial properties is very high. There is currently an influx of foreign investors planning to build much needed accommodation, and with an annual shortfall of approximately 100,000 units, now is seen as an excellent time to invest.
The business community is growing very quickly in Rwanda and as a result so is the demand for commercial and residential units, particularly in Kigau, Rwanda’s largest city. The growth of the middle class, along with the recent improvements in infrastructure are encouraging significant investment, both foreign and local. It has been forecast that by 2022 over 458,000 houses will be required in Kigau.
Kenya is one of Africa’s 10 largest economies and Nairobi is one of the world’s top 3 fastest growing economies. Its location makes it a gateway to the rest of the continent and it is already home to a number of very large business headquarters, including IBM, Google and Coca-Cola. Tourism is also growing, ensuring that there is demand not only for residential properties but also hotels and guest houses.
Angola is the 5th largest economy in Africa and despite significant recent investment and subsequent development, it is still suffering from a serious lack of good quality commercial and residential properties.
The vast oil industry is increasing the demand for commercial properties in the port area of Luanda, in fact the price of space per square meter, per month in this area is $150/m2, making it one of the most expensive places in the world to rent office space.
Pictures : newtimes.co.rw and blackwellrealtyghana.com and luxafrique.net