Demand for high-quality projects in Africa increasing amid strong economic progress
The demand for top-quality commercial and residential property continues to increase in Africa down to continent’s strong economic growth, according to Knight Frank’s Africa Report 2013.
Africa has recorded the average growth of over 5 percent per annum over the last decade and that has intensified its real estate market, it says.
The strong economic progress will continue in the forthcoming months and will continue to make the populations, particularly in the largest urban centers, prosperous.
The report says that large cities such as Accra, Nairobi, Lagos and Johannesburg and Lusaka are increasingly becoming the cornerstones of Africa’s economic growth and are thus attracting the mounting interest from the investors, developers and occupiers.
Peter Welborn, Knight Frank’s head of Africa, said that the rising interest of global investors towards the emerging markets is increasing external investment in Africa more than ever.
The report says that most of the under construction projects or those planned by private property developers are situated on the outskirts of large cities that reflects the need of greater volumes of good quality housing. The examples include La Cité du Fleuve scheme in Kinshasa and the Eko Atlantic scheme on Victoria Island in Lagos.
It says that within the retail sector, the growing wealth and lavishness of the African buyers is leading to an increasing demand for luxury retail formats. In the recent years, the countries such as Kenya, Nigeria, Ghana and Zambia have witnessed a wave of retail construction activity that has given the first-generation of luxury western-style shopping malls to several mega cities.
In the office sector, many large African cities lack the international standard buildings. This deficiency has led to extreme rent increase in the cities like Luanda and Lagos, where the demand of office space has been greatly increased following the arrival of international occupiers in the oil and gas sector.
Over the last decade, the African economies have seen a significant diversification and the non-traditional sectors such as mobile industry have pushed the long-established oil and banking sectors behind to take the center stage. The technology boom in Africa has opened new sources of office market demand and there are now numerous emerging technology centers in the continent, such as Silicon Lagoon in Lagos and Silicon Savannah in Nairobi.
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