Tanzania, Ethiopia, Kenya and Rwanda have been Africa’s strongest-performing economies over the past two years, according to Knight Frank’s Africa Report 2017.
The report also names Côte d’Ivoire and Senegal as emerging hotspots, but highlighted a widening gap between the success of commodity-importing and commodity-exporting countries with the former outpacing the latter in terms of occupier and investor activity.
Development activity in sub-Saharan Africa is being fuelled by rapid population growth and urbanisation and the retail property sector continues to be a major focus as the shopping mall concept takes hold in a wide range of cities, with Nairobi remaining an important hotspot for development.
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, in Côte d’Ivoire, provides a good example of a capital city where the proposed schemes are supported by offshore investors.
“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 for new developments.”
Welborn added: “The challenge for both property developers and investors is to ensure that the impact and timing of planned infrastructure projects on the growth of their capital city is fully understood. Getting the timing and the use mix right will help ensure success.”
AFRICA: THE DATA
Prime rents: 2015 v 2017
Prime yields: 2015 v 2017
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