Increased numbers of international investors are investigating opportunities in African real estate markets, attracted by the continent‘s startling economic and demographic growth prospects.
According to independent global property consultancy Knight Frank, which this week published its Africa Report 2015, the population of Africa will quadruple to over 4bn by 2100, with nearly 1bn of these people in Nigeria alone. This is arguably the single most important demographic trend that will shape the world over the course of this century.
Highlights from the report include the salient prediction that by 2100, nearly 40% of the world‘s population will live in Africa, with the large majority of these being in the continent‘s fast-growing cities. Today, Nigeria is the largest economy in Africa with GDP estimated at $433.05bn, followed by South Africa (£248.7bn) and Sub-Saharan Africa is one of the world‘s most rapidly developing economic regions. It‘s projected that 13 of 20 fastest-growing global economies over the next five years will be in Africa
The largest cities of Sub-Saharan Africa are growing at a rapid pace; Luanda‘s population is forecast to increase by more than 70% during the 2010-2025 period, while Dar es Salaam, Kampala and Lusaka are expected to double. Allied to strong economic growth, this is creating increased demand for good quality real estate of all types.
The retail sector has seen a huge increase in activity as a result of the rise of the urban middle class and the expansion of South African retailers such as Shoprite and Pick n Pay into the rest of Africa. Modern shopping malls are a relatively new concept in much of Africa, but a spate of new malls has been developed in key cities such as Accra and Nairobi.
Matthew Colbourne, Associate of International Research said “The growth of Africa‘s cities and economies will do much to define the global socio-economic landscape over the coming decades. These major long-term trends are driving the construction of high quality real estate across the continent. The most visible demonstration of this is the rise of the modern shopping centre concept in cities such as Nairobi, Lagos and Accra, but there are development opportunities in all property sectors.
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.”