INTO AFRICA November Edition: Spotlight on Africa’s Real Estate

LAGOS, Nigeria, Capital Markets in Africa: Welcome to the November edition of INTO AFRICA, a publication with fresh insight into Africa’s emerging capital markets. In this edition, we bring a selection of insights on Real Estate and Property Investment prospects and challenges in Africa. Please download by clicking: INTO AFRICA PUBLICATION: NOVEMBER EDITION

Macroeconomic pressures continue to bear on economies in the African region. Low commodity prices, slowing global demand and uncertainty in the FX markets as well as weakening GDP growth have lowered forecasts and with this a shift in investment priorities. Political uncertainty and fiscal tensions add to the adjusted outlooks while economic growth has undoubtedly decelerated over the course of the year. 

Despite these headwinds, the Real Estate markets in Africa have experienced a considerable upturn in recent years, driven by rapid urbanization, a growing middle class demographic and increasing political stability which has caught the attention of marginal and corporate investors. A Report by Knight Frank projects that between 2015 to 2020, 13 of the 20 fastest-growing economies in the world will be in Africa and Real Estate remains one of the key drivers of this change. These macroeconomic factors coupled with real estate market dynamics in growth markets create compelling investment opportunities.

The Real Estate market in Africa is undeniably in its early stages. In recent years Africa-focused Real Estate Funds have closed in extremely strong positions exceeding their targets. The Novare Africa Property Fund II had its first close in 2014 raising $351 mil. The Phatisa Group raised $42mil investing in middle-income housing development projects allowing the real estate funds in the market to target a combined $2.2 bn. RMB Westport Real Estate Development Fund II met its target of $450mil, Actis Africa Real Estate Fund 3 closed its third private Africa real estate fund at more than $500 million. The Abraaj Group successfully deployed an income generating real estate fund in the Middle East, North Africa and Turkey regions.

This issue also looks at some of the key developments in the legal and financial frameworks as well as the continuing efforts to bridge the gap between Infrastructure and finance which are at the heart of the development and embedding of international standards within this market.



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