Why Africa Is ‘Last Frontier’ For Real Estate Developers And Investors

Why Africa Is ‘Last Frontier’ For Real Estate Developers And Investors

By Adrian Bishop | From OPP.TODAY

Africa is set for a major property boom in the coming years, market experts believe. Just based on population growth alone, there is likely to be a huge rise in demand for housing and significant opportunities for developers and agents.

By the end of the century, Africa’s population is set to rise four fold, with four out of 10 of the world’s population living there and almost a billion people in Nigeria alone, according to demographic projections. Leading legal and financial experts say the continent is the ‘last frontier’ for real estate and with rapid economic growth and increasing infrastructure

African markets are hungry to learn from foreign developers and property professionals, including law firms, are preparing to respond to the needs of a growing number of international investors.

Pieter Niehaus, Director of leading international legal company, Norton Rose Fulbright, in Africa, says demographics are vitally important in the growing demand for property investment.

“Demographics on the African continent is a major driver for the real estate industry predominantly as a result of close to half of the total population on the continent being younger than the age of 30. That in turn means that there is an ever growing need for the development of public service infrastructure, housing, industrial, formal agricultural, telecommunications and retail facilities to meet the demand of the population. Many countries in Africa have the development of particularly infrastructure (energy, roads, rail, water and sanitation), educational and health facilities listed as top priorities and it is also in those sectors that foreign financial support plays an important role.”

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But there are also other reasons why African real estate demand is growing.

“For all intents and purposes, the African continent is the ‘last frontier’ with over 50 different countries, each with their own languages, cultures, legal systems and agendas, but all have one thing in common and that is the need to ensure they meet the demands of its citizens. With a land mass that includes the entire Europe, most of Asia and the Americas and Australia, it has an abundance of mineral riches both onshore and offshore that has elicited the interest of the western and eastern hemisphere’s superpowers. With the development that flowed from the mining and commodity sectors, it was unavoidable that towns and cities grew which necessitated the improvement of existing infrastructure, particularly in the fields of road, rail and energy supply. Furthermore, with Africa having so many developing markets which have much higher interest rates as well as cap rates in respect of commercial, retail and industrial properties, many traditional property investors are venturing into the African real estate market to achieve potentially better return on investments compared to their domestic markets.”

Read more at OPP.TODAY