Builders of a $7-billion waterfront development in Angola’s capital, Luanda, hope to attract an international hotelier to boost the project’s profile, Bloomberg reports.
Baia de Luanda SA is developing four plots in the upscale city beachfront area and it wants a flagship hotel on the site. The development will be part of a seven-kilometer (4.3-mile) spit in the Atlantic known as the Ilha that is surrounded by yacht clubs and some of the Luanda’s most expensive restaurants.
Shareholders in Baia de Luanda include Isabel dos Santos, daughter of the Angolan president, and state oil company Sonangol Holdings.
“We have people knocking on our doors to have hotels here, whether Americans or Angolans,” said Mauro Filipe Martins, business development director at Baia de Luanda, in a site interview, Bloomberg reports. “This project is a postcard for the new Angola.”
Martins said Hilton is one of the hotels developers hope to attract.
Recovering from a 27-year civil war ending in 2002, Africa’s second-largest oil producer is trying to attract foreign investors to help diversify its economy away from oil.
Dozens of construction cranes line the Luanda skyline as retail, homes and office developments are built to accommodate a growing middle class, Bloomberg said.
The Angolan capital is Africa’s fifth-largest city after Cairo, Lagos, Kinshasa and Johannesburg, with almost 6 million people, Bloomberg reports.
Luanda is also the most expensive city in the world to station an employee, according to Mercer, a global human resources consulting firm. Luanda topped Mercer’s 2013 Cost Of Living rankings.
Excluding oil, Angola’s economy is expected to grow by 6.4 percent this year, up
from about 5.8 percent in 2013, the International Monetary Fund said March 19. Total gross domestic product grew an average of 9.2 percent in the five years up to
2012, according to the government.
Angola’s oil production is second to Nigeria’s in Africa, pumping 1.68 million barrels a day in May, according to Bloomberg.
The waterfront needs international brands such as the hotel chains to boost confidence in the developments and attract other foreign investors, said Fernando da Ponte, manager at Luanda-based real-estate company Century 21 Angola, Bloomberg reports.
There are three other projects under construction near the bay that could add 350,000 square meters (3.8 million square feet) of new space.
“There is demand for retail and office space, but they’ll have to bring in big commercial brands as tenants or they won’t be able to support these developments,” da Ponte said. “Compared with four years ago, when buyers would accept anything, developers now have to make sure they provide good finished spaces.”
Hotel chains including Hilton and Marriott International Inc. — owner of the Ritz-Carlton and Renaissance brands — are expanding in Africa to take advantage of demand for business travel and rising disposable income. Neither are in Angola, where hotel investment has been mostly limited to companies from Portugal, the former colonial ruler of Angola. These hotel brands include TD Hotels’s Tropico and the Epic Sana Luanda, run by Lisbon-based Sana Hotels.
Angola is perceived as one of the most difficult countries in the world in which to do business, placing 153rd out of 177 countries on Transparency International’s 2013 Corruption Perceptions Index. It ranked 179th of 189 countries in the 2014 World Bank Ease of Doing Business Index.
“The major challenge for hotels will be in education,” Baia de Luanda’s Martins said. “They know this and that they’ll have to train everyone to be service-oriented and professional.”
When Marriott bought Cape Town-based Protea Hospitality Holdings in April for $200 million, it almost doubled its rooms in Africa to about 23,000, Bloomberg reports. A spokeswoman for Marriott declined to comment on the company’s plans for Angola. A
spokeswoman for Hilton didn’t return Bloomberg’s e-mailed request for comment.
