Sub-Saharan property investment gathers pace
By global standards, most property investment markets in Africa are opaque and small. The exception is South Africa, which is by far the continent’s largest and most mature market. Other Sub-Saharan markets are now attracting increased interest from international investors, but the most noteworthy flow of capital in recent years has been from South Africa into the rest of the Sub-Saharan region, as a growing number of funds have been established by South African developer/investors targeting the rest of the continent.
A prominent example is RMB Westport, affiliated to Rand Merchant Bank, whose Real Estate Development Fund was closed in 2012, having raised US$250 million, and is involved in office and retail projects in Angola, Ghana and Nigeria. Other South Africa-based investors targeting Sub-Saharan markets include Sanlam, Stanlib, Resilient, Ivora Capital, AttAfrica and Momentum.
Investment in African real estate by international investors is limited, although the UK-based emerging market specialist Actis has been a trailblazer in Africa since 2004. Actis has successfully closed two African real estate funds, and is presently fundraising for a third fund. Its current projects include Jabi Lake Mall, which will be the largest shopping centre in Nigeria’s capital Abuja, and One Airport Square, a striking new office development in Accra. Several other well-established international institutional real estate investors are known to be seriously investigating African markets and planning investment strategies.