A Ghanaian real estate professional is hoping he can sell the concept of fractional real estate ownership to locals, overseas investors and buyers in other emerging markets who want to own a piece of Ghana, but can’t afford the whole pie.
In fractional ownership, investors own a fraction of a single piece of property, for example, a house, and share ownership with other buyers. Each owner gets to live in the home for a specified period based on the size of the ownership share, according to a report in Opp.Connect.
There are no fractional real estate sales in Ghana yet, but the demand for luxury real estate is huge, and fractional ownership is a way of making it affordable, says real estate professional Peter Atsu Tsikata. Tsikata is the CEO of brokerage and property management company, Millennium Properties Ltd.
Tsikata told Opp.Connect that the demand for luxury real estate in Ghana is fueled by Ghanaian professionals living abroad but trying to invest in their home country, a growing expat population, Nigerians with oil money, companies buying for their senior executives, and real estate investors buying for their investment portfolio.
“There is a huge Ghanaian and African population in the diaspora whom fractionals will appeal to,” Tsikata said. “They need somewhere to perch when they visit home and not go perching with relatives. That market must be targeted and explored for fractionals in Ghana.
The fractional ownership concept will also appeal to overseas investors in other emerging markets, Tsikata said. However he urges investors to be aware of land title legislation. Reputable developers should cover this as part of the due diligence, he said.
Ghana’s capital, Accra, population 2.3 million, is the focus of major construction work, according to the report. Real estate developers are buying land on the outskirts of Accra at bargain prices to hold for future real estate development.
Billboards announce real estate projects under construction on the drive from Accra Central on Independence Avenue all the way to Tetteh Quarshie.
The area seeing the most development is Airport City. Projects include mixed-use Icon House, flagship development of South Africa’s RMB Westport. Next door is Nester Square, another mixed-use office tower and retail development being built for Ernest Chemists by DeSimone Ltd., Opp.Connect reports.
Trassaco recently completed the African Sun Hotel and other international hotels are entering the market near Kotoka International Airport.
In the Oxford Street area of Osu on Kuku Hill, a 1.2-acre plot is the site of Chateau Towers, a 120-unit apartment complex from Hollywood International Developers — its first project in Ghana.
In the prime areas of Accra, The Cantonments, Airport Residential and Ridge areas are seeing the most competition for high-end residential real estate development, according to the report.
“The rush to build in these areas is not surprising, considering the high rents properties command here,” Tsikata said. “Expect to buy a three- to four-bedroom apartment in these areas from US$450,000-US$600,000, and rent them for US$3500-US$4500 unfurnished. A one-acre land in these areas costs $2.5 million-to-$3 million.”
Meridian Apartments II, Kwarleyz, Sloan House and Villaggio Vista are under construction at the Airport Residential area. Switchback Park Project, Aurora Apartments, Goldkey Properties and Devtraco are building residential properties in the Cantonments and Ridge areas. The Villaggio Vista and La Beach Tower developments have US$2 million penthouse apartments.
Even though demand for mid- and low-end residential real estate is high, supply is short because of the lack of construction financing, according to the report. It is in this area that foreign investor participation is most needed, Tsikata said.
Ghanaian President John Dramani Mahama announced a deficit of 1.7 million homes during a State of the Nation address, Opp.Connect reports. He said the government welcomes foreign investors in housing.
Ghana approved South Korean investor STX to build 200,000 houses, but the project collapsed due to “boardroom wrangling,” the report said. However, this is evidence of the open-door policy of government to attract foreign participation in this sector.
