Exploring the potential of the continent and its property markets
With a large section of the Investment Locations Forum having been dedicated to “Sub-Saharan Africa” for the second time at EXPO REAL, some of you may have asked yourselves why that might be.
It’s actually rather straightforward: As Ray Mahlaka, Property Journalist at Moneyweb in Johannesburg (South Africa) put it, Africa is a “rising continent.” But perhaps the most important thing to consider here is that very few people are currently aware of this fact. Given that EXPO REAL is all about identifying trends and developments as they emerge, the trade fair has also taken it upon itself to provide information to its visitors about the potential possessed by this continent and its property markets.
Economic and demographic growth across Sub-Saharan Africa
Despite the diversity of the 54 countries that make up Africa, there is one thing in common across the Sub-Saharan region: both economic and demographic growth. These two types of growth are closely intertwined, as Christian Hiller von Gaertringen, who has been the Africa correspondent at German newspaper Frankfurter Allgemeine Zeitung for many years, and who also penned the book Afrika ist das neue Asien (Africa is the New Asia), pointed out in his keynote speech at EXPO REAL. Demographically, Africa has a largely young population which in itself is driving growth. With the education on offer to young people constantly improving, a middle class of willing consumers is forming. In terms of economic growth, Hiller von Gaertringen dispelled one prejudice—that raw materials are the key to Africa’s economy. He works on the general assumption of growth sitting at 3.7 percent in 2016. If you subtract the countries that export natural gas, the average growth is 3.9 percent, with the range spanning from negative growth to significantly more than 7.5 percent, depending on the country.
Although property investors have been drawn to locations around the world, including Latin America, India, and China, for many years now, only a select few even have Africa on their radar. As Jos Tromp, Executive Director and Head of Research Continental Europe at CBRE (Amsterdam) explained at the trade fair, Sub-Saharan Africa has “a whole host of opportunities and possibilities to offer.” He added: “But many international companies still struggle to really understand Africa.”
Africa as part of the “global property universe”
One goal that EXPO REAL has set for itself is to heighten this understanding and promote exchange between African companies and European companies that already have a presence within Africa. Africa is by no means an easy option—there are risks involved and, as in many other parts of the world, reliable partners are essential. However, as David Lashbrook, Head of Africa Real Estate at Momentum Global Investment Management (London), says: “It’s time for us to acknowledge the fact that Africa is part of the global property universe.” Or, in the words of Akin Olawore, Principal Partner of Akin Olawore & Co in Lagos (Nigeria): “With all the opportunities and possibilities it has to offer, Africa is the next investment destination.” Investors willing to take a risk can truly expect to achieve the kinds of returns that are hard to come by now on the established European markets.