AFRICA REPORT - RESEARCH - REAL ESTATE MARKETS IN A CONTINENT OF GROWTH AND OPPORTUNITY - Knight Frank
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RESEARCH AFRICA REPORT 2017/18 REAL ESTATE MARKETS IN A CONTINENT OF GROWTH AND OPPORTUNITY
AFRICA REPORT 2017/18 RESEARCH
CONTENTS
AFRICA: STILL RISING?
03 Africa: still rising?
The rise of Africa’s economies has been interrupted by recent external shocks,
08 Capital markets review
but there remain grounds for optimism over the longer-term outlook.
10 Sector focus: retail
12 Sector focus: logistics After decades of disappointing
FIGURE 1
performance, African economic growth
14 Algeria African GDP in current US$
began to accelerate around the turn of
the century. The continent averaged
15 Angola
GDP growth of more than 5% per annum 2,000
Sub-Saharan Africa North Africa
16 Botswana between 2000 and 2014, primarily driven
by fast-growing Sub-Saharan economies.
17 Cameroon During this period, the term “Africa Rising”,
1,500
GDP (Current US$ billions)
18 Chad popularised by publications such as The
1,000
Economist, became shorthand for this
19 Côte d’Ivoire rapid economic growth and the increased
optimism about Africa’s future prospects. 500
20 Democratic Republic of the Congo
However, economic growth has since
21 Egypt
moderated, due primarily to the exposure
0
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2008
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2010
2011
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2013
2014
2015
22 Equatorial Guinea of African countries to external factors
including falling commodity prices and
23 Ethiopia slower growth in China. The International Source: World Bank/Knight Frank calculations
Monetary Fund (IMF) estimates that
24 Gabon and commodity-exporting countries Nigeria entered recession in 2016,
African GDP growth slowed to 3.4% in
since 2015. The major oil exporters, in while the IMF expected Angola to
25 Ghana 2015, easing further to 2.1% in 2016.
particular, have been impacted by low record zero growth for the year. Smaller
Growth for the Sub-Saharan region was
26 Kenya estimated at just 1.5% in 2016. Against oil prices, but more resilient growth rates oil-driven economies, such as Equatorial
this backdrop, the question “is Africa still have been seen in oil-importing countries. Guinea and Gabon, have also been
27 Madagascar
rising?” has moved to the forefront of severely impacted by the decline in
Within Sub-Saharan Africa, the drop in
28 Malawi economic debate. commodity prices.
GDP growth can be largely attributed to
29 Mali the region’s three biggest economies; Although South Africa is a net oil
A multi-speed Africa Nigeria, South Africa and Angola. As importer, its growth has been subdued
30 Mauritania The headline GDP figures disguise Africa’s two largest oil exporters, Nigeria by weakness in the mining and
31 Mauritius the increasingly multi-speed nature of and Angola have both seen oil revenues manufacturing sectors and the effect
African economies. In broad terms, there badly hit by lower prices, and this has of a severe drought on agricultural
32 Morocco has been a divergence between the additionally put strain on government production. The country only narrowly
growth rates of commodity-importing spending, debt levels and currencies. avoided entering recession in 2016.
33 Mozambique
34 Namibia
FIGURE 2 FIGURE 3
35 Nigeria Sub-Saharan Africa GDP growth Sub-Saharan Africa GDP growth rates
rates by decade
36 Rwanda
6 10%
5.64
37
ESTIMATE
FORECAST
Senegal
8%
5
38 South Africa
Compound annual growth rate (%)
4.06 6%
39 Tanzania 4 3.79
3.33 4%
40 Tunisia 3
2%
41 Uganda 2 1.70
0%
42 Zambia 1
1.01
-2%
43 Zimbabwe
2010 2011 2012 2013 2014 2015 2016 2017
0
Oil-exporting countries Oil-importing countries (excluding South Africa) South Africa
44 Africa commercial occupier guide 1960s 1970s 1980s 1990s 2000s 2010s
to date
47 Knight Frank in Africa Source: World Bank/Knight Frank calculations Source: International Monetary Fund
10%
2 3
TIMATE
RECAST
AFRICA REPORT 2017/18 RESEARCH
AFRICA GDP GROWTH
In contrast, a group of commodity- food and agriculture processing, populations with limited access to
importing East African countries, business process outsourcing, financial formal banking. East Africa, in particular,
RATES, 2016
including Tanzania, Ethiopia, Kenya and services and construction. There is is a hotbed for innovation in this
Rwanda, have all maintained GDP growth also significant growth potential for sector and, according to Global Findex
rates well in excess of 5%, benefiting manufacturing industry in Africa, as this data, Kenya leads the world, with
from low oil prices and growth in private sector consistently underperforms in 58% of the population having mobile
consumption and investment. The West comparison with other emerging markets.
money accounts.
African economies of Côte d’Ivoire and
Technological change will be at the heart
Senegal have also emerged as two of the African mobile phone markets have
of the future growth and diversification TUNISIA
continent’s strongest performers aided now entered a second phase of growth,
of African economies. Mobile
by improved political stability, economic as consumers shift from basic feature
telecommunications have already had a MOROCCO
reforms and infrastructure investment. phones to smartphones. By 2020, it is
transformative socio-economic impact
in Africa by allowing large sections of the expected that smartphone connections
In a reversal of the general pattern of
will be the majority in Africa. The adoption ALGERIA LIBYA
recent years, the North Africa region saw population to skip landlines and move EGYPT
higher GDP growth than Sub-Saharan straight to wireless technology. This has of more sophisticated mobile technology
WESTERN
Africa in 2016. However, growth within led to African consumers embracing will have a large role in shaping consumer SAHARA
the region has been uneven and Libya mobile banking and payment services, behaviour, and it will drive the growth of
and Algeria have both been impacted by improving the financial inclusion of sectors such as online retailing.
lower oil prices.
MAURITANIA MALI SUDAN ERITREA
CABO
FIGURE 4 VERDE NIGER DJIBOUTI
Economic diversification Africa’s largest oil-exporting countries
and technological change SENEGAL CHAD
THE GAMBIA BURKINA
The current struggles of Africa’s oil- 100 100 FASO SOMALIA
GUINEA ETHIOPIA
producing countries emphasise the 90 90 BISSAU GUINEA NIGERIA
need for the continent’s economies to GHANA SOUTH
80 80 SUDAN
Value of oil exports (US$ billion)
Oil’s share of total exports (%)
diversify so that they are not dependent SIERRA CÔTE CENTRAL AFRICAN
70 70
on commodities, or any other single LEONE D’IVOIRE REPUBLIC
60 60 BENIN CAMEROON
source of economic output. Expediting LIBERIA TOGO UGANDA
50 50
the ongoing process of economic EQUATORIAL GUINEA KENYA
40 40
diversification is an absolute priority for
30 30 SÃO TOMÉ & GABON
many African governments. PRINCIPE DEMOCRATIC RWANDA
20 20 REPUBLIC BURUNDI
Potential sources of growth and OF THE CONGO
10 10 SEYCHELLES
diversification for African economies
0 0 TANZANIA
include sectors such as retailing, NIGERIA ANGOLA ALGERIA LIBYA EGYPT EQUATORIAL REPUBLIC GABON SOUTH CAMEROON REPUBLIC OF
GUINEA OF THE SUDAN THE CONGO
CONGO
Value of oil exports (US$ billion) Oil’s share of total exports (%) COMOROS
Source: Observatory of Economic Complexity (2014)/Knight Frank calculations ANGOLA
Data includes crude and refined oil MALAWI
ZAMBIA
FIGURE 5
Africa mobile technology growth forecasts
ZIMBABWE MOZAMBIQUE MAURITIUS
800 80
NAMIBIA MADAGASCAR
BOTSWANA
700 70
KEY
Smartphone connections (% of total)
Unique mobile subscribers (millions)
600 60 SWAZILAND
500 50
GDP growth estimates, 2016
LESOTHO
400 40
ABOVE 6.0% SOUTH AFRICA
300 30 4.1-6.0%
200 20 2.1-4.0%
100
0.1-2.0%
10
0% or lower
0 0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 NO DATA AVAILABLE
Unique mobile subscribers (millions) Smartphone connections (% of total)
MAJOR NET OIL EXPORTING COUNTRIES
Dar es Salaam
Source: GSMA Intelligence Source: International Monetary Fund
4 5
AFRICA REPORT 2017/18 RESEARCH
Population growth
and urbanisation
FIGURE 6
Global population forecasts AFRICA POPULATION DENSITY
While economic growth has faltered in
parts of Africa, demographic trends remain 6
Africa Asia Europe Latin America and the Caribbean North America Oceania AND CITY GROWTH
favourable to the continent’s longer term
5
development. The population of Africa is 3.5m 3.2m 3.6m 4.8m 18.8m 5.1m
rising at a faster rate than that of any other
4 CASABLANCA IBADAN KANO ALEXANDRIA CAIRO KHARTOUM
Population (billions)
global region and its demographic profile is
both young and increasingly urbanised. 3 1.2% 3.1% 3.0% 1.8% 1.8% 2.8%
Africa’s population has more than doubled 2
over the last 30 years to over one billion, and
the United Nations (UN) forecasts that it will 1
surpass four billion by 2100, which would be
0
3.2m
around 40% of the global population. With
2000
ADDIS ABABA
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100
other global regions likely to be characterised
by slower population growth and ageing 3.1%
trends over the coming decades, Africa
Source: United Nations Population Division 3.5m
will be home to an increasingly significant DAKAR
Cities Institute suggest that Lagos, Kinshasa environment also appears increasingly
portion of the global workforce. McKinsey
projects that, by 2034, Africa’s working-age
and Dar es Salaam will be the three most fractured. Recent patterns of growth 3.8% 1.9m
populous cities in the world at the end of have highlighted the diverse nature
population will be 1.1 billion, overtaking both KAMPALA
the century. The heavily urbanised stretch of Africa’s economies, and significant
China and India.
of coast running from Lagos through to variations in growth rates will persist, 4.2%
Rural-to-urban migration is intensifying the Ivorian capital Abidjan, covering the especially if oil prices fail to recover
population growth rates within many best part of 1,000 km, may provide the to levels that are more sustainable for
major cities in Africa. Currently, the urban foundation for a future global megalopolis. Africa’s oil-exporting countries.
population of Africa is increasing by more
Rapid population growth will create The outlook for 2017 and beyond is
3.9m
than 15 million people each year and the UN
challenges for city authorities and put strain coloured by wider global concerns. 4.9m NAIROBI
forecasts that Africa’s overall urbanisation
rate will increase from its current level of
on urban infrastructures. It will also create
opportunities for property development as
Much attention will be paid to the effects ABIDJAN
4.0%
of the Trump presidency on Africa and
around 40% to over 50% by 2040.
huge investment will be needed in the built whether, among other concerns, it
3.4%
The fastest growing cities of Africa are nearly environment of African cities if they are to threatens the future of the US African
all within the Sub-Saharan region, outside cope with the pressures of population growth. Growth and Opportunity Act (AGOA)
South Africa. Cities such as Kampala, trade agreement. However, it is possible 2.3m 2.4m 5.1m
Lusaka and Nairobi are currently growing at A complex but that OPEC deals limiting oil production ACCRA ABUJA DAR ES SALAAM
rates in excess of 4% per annum and, over will work to the benefit of African oil
the coming decades, an increasing number positive outlook exporters and spur a better-than-
2.0% 5.5% 5.5%
of Sub-Saharan cities will join the ranks of A more complex and challenging expected bounce in these economies.
the world’s megacities with populations over economic outlook has emerged for Africa,
Economic growth for Sub-Saharan
10 million. Projections made by the Global at a time when the global geopolitical
Africa is generally expected to show a 13.1m 11.6m
moderate recovery in 2017 and the IMF LAGOS KINSHASA
FIGURE 7
Africa urbanisation forecasts
forecasts that regional GDP growth will
be back above 4% by 2019. Over the
4.2% 4.0%
longer term, many of the factors that
1,400 70 supported economic growth in the early
1,200 60
part of the century will remain in Africa’s
People per sq km
5.5m
favour and its growing, young urban
LUANDA
1,000
population could prove to be Africa’s
Urban population (millions)
50
Urbanisation rate (%)
800 40 greatest asset in an ageing world.
1,000
4.3%
600 30 Recent events have underlined how
important it is for investors targeting
400 20
3.7m 9.4m 2.2m
Africa to gain a detailed understanding KEY CAPE TOWN JOHANNESBURG LUSAKA
200 10 of individual markets and to time their
market entry correctly. Africa continues to
0
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
0
offer great opportunities to investors able
Population (urban agglomerations, 2015) 1.1% 2.0% 4.7%
Urban population (millions) Urbanisation rate (%) Annual growth rates (2015-2020 projections)
to navigate the markets astutely and for
Source: United Nations Population Division those with long-term investment horizons. Source: Socioeconomic Data and Applications Center (SEDAC)/United Nations Population Division/Knight Frank
6 7
AFRICA REPORT 2017/18 RESEARCH
CAPITAL MARKETS REVIEW
A further noteworthy event during 2016 backed developments in Sub-Saharan world where such yields can be achieved
was the creation of Mara Delta, a pan- Africa include the UAE firm Eagle Hills’ by prime assets, not all international
African real estate fund formed from Century City project in the Nigerian capital investors will feel that these yields
A growing volume of capital is targeted at Sub-Saharan Africa the merger of Delta Africa and Mara Abuja. There is also strong interest from adequately compensate for the higher risk
Diversified Property Holdings. During Middle Eastern groups in Africa’s growing profile of African markets. Yield levels are
real estate investment and development. 2016, Mara Delta was one of the most hospitality real estate sector. supported by the strength of demand for
acquisitive buyers of real estate across the the very limited number of institutional-
Among Asian investors, Chinese groups
The persuasive long-term investment Investors’ appetite for Sub-Saharan Actis’ two previous funds, closed in 2006 region, growing a portfolio which currently grade assets that come to the market,
are most visible in Africa, although the and this dynamic is likely to be maintained
case for Sub-Saharan Africa has drawn real estate was highlighted in 2016 by and 2012, have been involved with some includes assets in Kenya, Mauritius,
Japanese government has also taken as recently-launched investment vehicles
increased numbers of international the announcement that the UK-based of Sub-Saharan Africa’s most modern Morocco, Mozambique and Zambia.
significant steps to encourage investment seek to grow their funds.
investors to investigate opportunities emerging markets specialist Actis had commercial property developments, in
The activities of South African investors in into Africa. Chinese institutions are
within the region over recent years, albeit raised US$500 million for its third African countries such as Ghana, Kenya, Nigeria Developments made by groups such
the rest of Africa are part of a wider trend heavily involved with the financing and
transactional activity has been restricted property fund, Actis Africa Real Estate and Tanzania. In recent years, Actis has as Actis and RMB Westport will add
that has seen them increasingly move into construction of large infrastructure
by the limited availability of investment- Fund 3. This is the largest amount that exited from many of its first wave of significantly to Sub-Saharan Africa’s
foreign markets in order to hedge against projects across Africa, but pure-play
grade stock and the opacity of the has ever been raised for a private real investments, selling its interests in assets investment stock over the next five years,
a weak rand and a sluggish domestic property investment involving Chinese
markets outside of South Africa. Interest estate fund focused on Sub-Saharan including the Accra Mall, Nairobi Business increasing the availability of assets that
economy. This has also led to South firms is much less common. Notable
in the sector remains heightened, despite Africa outside South Africa, and it included Park and Ikeja City Mall. meet international institutional investors’
African investors directing significant large-scale urban development projects
the weakening of some Sub-Saharan a commitment from the Government of When Actis launched its first Sub-Saharan requirements. However, global investors
volumes of capital to Central and Eastern involving Chinese investors include
economies over the last two years. Singapore Investment Corporation (GIC). Africa fund over a decade ago, it was a seeking to enter African markets may feel
Europe, attracted by the relatively high Shanghai Zendai’s Modderfontein New
pioneer entering a market largely untapped that it is prudent to initially follow the path
yields on offer in this region. During 2016, City, near Johannesburg. Additionally,
by global property funds. However, its third taken by GIC and Grosvenor by investing
FIGURE 7 South African investors including Hyprop, China’s state-owned AVIC has made a
fund will enter a significantly more crowded in funds created by established investors
Africa prime office yields Redefine and Tower acquired US$2.1 substantial investment in the mixed-use
marketplace as a series of property within the region, rather than making
billion of property in CEE markets. Two Rivers development in Nairobi.
investment vehicles have emerged in direct property investments. When raising
recent years targeting Sub-Saharan real Significant demand for African real estate Recent transactional evidence indicates capital, the new wave of Sub-Saharan
estate. Many of these are South African- stems from Middle Eastern investors, who that yields within the 7-9% range are property funds will seek to tap into the
ADDIS ABABA 6.00%
controlled funds, albeit often registered or generally have a preference for large-scale typical for investment-grade assets in the burgeoning demand from international
HARARE 8.00%
listed offshore in Mauritius. development projects rather than direct most attractive Sub-Saharan markets. investors seeking to gain exposure to
NAIROBI 8.00%
property investment. Middle Eastern- While there are few other regions of the Sub-Saharan Africa.
GABORONE 8.25% A prominent example is RMB Westport,
CASABLANCA 8.50% which was created in 2008 as a joint
JOHANNESBURG 8.50% venture between Rand Merchant Bank
Selected Sub-Saharan Africa investment transactions, 2015-16
PORT LOUIS 8.50% and the Westport Property Group. Its
WINDHOEK 8.50% current development projects include Date Property Location Sector Seller Buyer Estimated Reported
ABIDJAN 9.00% the Wings Office Complex in Lagos and price yield
(US$ million)
ACCRA 9.00% Muxima Shopping Centre in Luanda. RMB
Westport’s second fund, which has a target Q4 2015 Ikeja City Mall Lagos, Nigeria Retail Actis/RMB Hyprop (75%)/ 91.0 >8.00%
CAPE TOWN 9.00%
Westport/Paragon Attacq (25%)
DAR ES SALAAM 9.00% of raising US$450 million, has attracted
commitments from both GIC and the UK Q2 2015 Two Rivers Development Nairobi, Kenya Mixed Use Centum Aviation 70.0 N/A
LAGOS 9.00% (39% stake) Industry
investor Grosvenor.
ABUJA 9.50% Corporation of
China (AVIC)
BLANTYRE 9.75% Other real estate investment vehicles
to have been launched in the last two Q4 2015 East Park Mall, Acacia Lusaka & Ndola, Retail/Office Casilli Group SA Corporate 49.6 8.68%
ALGIERS 10.00% Office Park & Jacaranda Zambia
years include a pan-African joint venture
Mall (50% stakes)
DAKAR 10.00% created by Growthpoint and Investec,
Q3 2015 Wings Oando Development Lagos, Nigeria Office RMB Westport Pivotal 49.0 N/A
DOUALA 10.00% which has the target of raising US$500 (37.1% stake)
KAMPALA 10.00% million. Momentum Global Investment
Q2 2015 Vodacom Building Maputo, Mozambique Office Sociedade De Delta (now 46.0 6.63%
Management and Eris Property Group have Construçoes Mara Delta)
LUSAKA 10.00%
also formed a joint venture, the US$250 Catemba
MAPUTO 10.00% million Momentum Africa Real Estate Fund, Q4 2016 Cosmopolitan Mall Lusaka, Zambia Retail Rockcastle Mara Delta 37.1 7.75%
CAIRO 10.50% which has allocated capital to development (50% stake)
TUNIS 10.50%
projects in Ghana and Nigeria. Q4 2015 Bagatelle – Mall of Mauritius Bagatelle, Mauritius Retail Atterbury Ascencia 28.9 c.7.00%
(34.9% stake)
KIGALI 11.00% The Anglo-South African group Old Mutual
Q4 2015 Makuba Mall & Kafubu Mall Kitwe & Ndola, Zambia Retail Rockcastle Delta (now 21.6 7.75%
signalled its intention to expand its African
KINSHASA 12.00% (50% stakes) Mara Delta)
footprint by announcing a partnership
Q4 2015 Greenspan Mall Nairobi, Kenya Mixed Use Greenspan Stanlib Kenya 20.0 8.10%
LUANDA 14.00% with the Nigerian Sovereign Investment
Mall Limited Fahari I-REIT
Authority in the second half of 2016. This
Q1 2016 Barclays House Ebene, Mauritius Office Jade Group Delta (now 13.4 8.30%
venture aims to raise US$500 million for a Mara Delta)
real estate fund, in addition to a US$200
Source: Knight Frank Research million agriculture investment vehicle. Source: Knight Frank Research/Real Capital Analytics/Company reports and financial statements
8 9
AFRICA REPORT 2017/18 RESEARCH
SECTOR FOCUS: RETAIL SELECTED SHOPPING MALL OPENINGS
Sub-Saharan Africa’s modern retail stock continues to 2015-Q1 2017
grow in size and quality.
The development of The retail property sector has been a
major focus for development activity
Garden City Mall (33,500 sq m) in 2015,
followed by the opening of The Hub
modern shopping within Africa over the last decade, (30,000 sq m) in the affluent suburb of
malls is changing the causing the shopping mall concept to
take root in increasingly wide range
Karen in 2016. The 67,000 sq m Two
Rivers Mall, which is now the largest in
urban landscapes of of major African cities. Development Kenya, opened in February 2017.
Sub-Saharan Africa has been driven by the growth of the
Elsewhere, developers including 20,000 15,000 14,000 12,000
continent’s consumer markets and the
Atterbury, Novare, Resilient and RMB sq m sq m sq m sq m
expansion of domestic and international
retailers, particularly the leading South Westport have all delivered modern mall PLAYCE MARCORY ACHIMOTA RETAIL CENTRE DELTA MALL ONITSHA MALL
projects over the last two years, adding Abidjan, Cote d’Ivoire Accra, Ghana Warri, Nigeria Onitsha, Nigeria
African supermarket chains such as
to the retail stock of countries including Opening date Q4 2015 Opening date Q4 2015 Opening date Q2 2015 Opening date Q2 2016
Shoprite, Pick n Pay and Game. Developer/investor Developer/investor Developer/investor Developer/investor
Ghana and Nigeria. The positive growth CFAO Atterbury/Delico Resilient Africa African Capital Alliance
South Africa is by far the largest and outlook for Côte d’Ivoire and Senegal has Anchor tenants Anchor tenants Anchor tenants Anchor tenants
most mature retail market in the Sub- caused these countries to also attract Carrefour Shoprite, Palace Shoprite Shoprite
Saharan region, with approximately 23
increased interest, having previously
million sq m of shopping centre floor
seen relatively limited modern retail
space, compared with only about 3
development. 350Of particular note, CFAO
million sq m in the whole of the rest of
has opened PlaYce Marcory in Abidjan as
Sub-Saharan Africa. The South African 300
the first of a series of Carrefour-anchored
market continued to grow in 2016,
malls that are planned for West and
250
most notably through the completion
Central Africa.
of Atterbury’s 131,000 sq m Mall of 200 25,000 22,000 22,000
Africa, the largest single-phase mall Large volumes of modern retail space sq m sq m sq m
150
development ever in Sub-Saharan Africa. remain in the pipeline across Sub- JABI LAKE MALL NOVARE LEKKI MALL XYAMI SHOPPING NOVA VIDA
Abuja, Nigeria Lagos, Nigeria Luanda, Angola
Outside of South Africa, the Kenyan Saharan Africa,
100 although the weakening
Opening date Q2 2015 Opening date Q3 2016 Opening date Q4 2015
capital Nairobi has the greatest volume of the oil-driven economies has led to Developer/investor Developer/investor Developer/investor
50
of modern retail floor space in Sub- the postponement or scaling down of Actis/Laurus/Duval Properties Novare/Urshday Zahara Imobiliária
some projects0in these countries. With Anchor tenants Anchor tenants Anchor tenants
Saharan Africa, and it continues to be a Shoprite, Game Shoprite, Game Kero
development hotspot. The city saw the most of the region’s major capital cities
completion of the first phase of Actis’ now having at least one modern mall,
developers have increasingly targeted
secondary cities in order to gain first-
FIGURE 8
mover advantage in these locations.
Completed shopping centre space in Sub-Saharan African cities
There are also signs that pragmatic
500,000
developers are now concentrating on
the delivery of well-located small and
500000
450,000
medium-sized convenience shopping
450000
400,000
centres rather than regional mega-malls.
400000
350,000 131,000 67,000 33,500 30,000 26,000
As the
350000 sector grows and competition sq m sq m sq m sq m sq m
300,000
250,000 between retail schemes intensifies,
300000 MALL OF AFRICA TWO RIVERS MALL GARDEN CITY MALL (PHASE ONE) THE HUB KAREN COSMOPOLITAN MALL
developers will seek to differentiate their
250000 Guateng, South Africa Nairobi, Kenya Nairobi, Kenya Nairobi, Kenya Lusaka, Zambia
200,000
malls by offering access to international
200000 Opening date Q2 2016 Opening date Q1 2017 Opening date Q2 2015 Opening date Q1 2016 Opening date Q1 2016
150,000 Developer/investor Developer/investor Developer/investor Developer/investor Developer/investor
brands, leisure facilities and upscale
150000 Attacq/Atterbury Centum/Athena Properties Actis/Aspire/Mentor Management Azalea Holdings Rockcastle
100,000
consumer experiences. Selecting the
100000 Anchor tenants Anchor tenants Anchor tenants Anchor tenants Anchor tenants
50,000 Edgars, Woolworths, Game, Carrefour, LC Waikiki Game, Nakumatt Carrefour Shoprite, Game
right
50000micro-locations for development
0
Checkers Hyper
will be
0 crucial to the success of new
I
NE
RE
S
AM
A
JA
LA
KA
DA
K
OB
N
O
LI
A
R
E
SA
GO
CR
OE
GW
AB
UT
KA
JA
U
PA
RA
GA
SA
RO
AN
LA
centres, particularly in cities that already
IR
HA
AB
DH
AC
LA
AP
ID
AB
DA
M
NA
HA
KI
LU
ON
BO
LU
SA
NS
AB
KA
IN
M
IS
GA
LIL
W
ES
KI
D
have successful existing malls. Modern
AD
R
DA
Completed GLA (sq m)
mall development will play a major role in
Source: Knight Frank Research
Graph excludes South African cities
shaping the future landscapes of Africa’s
Floor space estimates include schemes with a minimum gross leasable area (GLA) of 5,000 sq m growing cities.
10 11
AFRICA REPORT 2017/18 RESEARCH
SECTOR FOCUS: SELECTED LOGISTICS
LOGISTICS DEVELOPMENT PROJECTS
The logistics property sector has emerged as
a growing focus for new development. Africa Logistics
Properties
Over the last decade, modern ports are also hotspots for logistics Tunisia
Morocco Nairobi, Kenya
commercial property development within developers, as Africa’s reliance on sea
Sub-Saharan Africa has largely been transport for international trade means Africa Logistics Properties (ALP) is an
concentrated on the retail and office that its ports are crucial locations in firms’ investment vehicle backed by the East
Algeria African group Maris. ALP is seeking
sectors, with logistics development logistics networks. Dubai’s DP World Libya to raise US$65-70 million, including a
being more limited. However, there is is notably active in the development Egypt
proposed investment from the World
a growing recognition that the region’s and operation of ports and associated Bank’s International Finance Corporation
key cities are undersupplied for modern logistics property in Africa. arm, to develop logistics parks on sites
logistics space. Development activity around Nairobi.
is burgeoning, supported by demand The future of African logistics property
for high quality space from retailers and markets will be shaped by the impact
Mauritania
consumer goods manufacturers seeking of disruptive technologies. Drones, CoastDryport
to expand their African operations and for example, have the potential to Mali
Soga, Tanzania
Niger
improve distribution networks and help logistics operators overcome Sudan
supply chains. the deficiencies of African transport The US-based BlackIvy Group has plans
Senegal to build a dry port and intermodal logistics
infrastructure, by enabling the movement Chad
New developments opened in 2016 Burkina
park at the village of Soga, west of Dar es
of goods to locations without reliable Faso Salaam. The 500 acre site will be served
included York Commercial Park in the
road networks. A system described Guinea Benin by two dedicated rail lines.
Zambian capital Lusaka and the Agility
as the world’s first commercial drone Ghana
Nigeria
Distribution Park at the Port of Tema in
delivery service was launched in Rwanda Côte Ethiopia
Ghana. Both projects offer built-to-suit d’Ivoire
units of a quality previously unavailable by the US company Zipline in 2016. Central
South Sudan
Kigali Logistics Platform
African Republic
Kigali, Rwanda
in these markets. The Ghanaian project The rise of online retailing will also shape Cameroon
is the first of a number of logistics parks logistics property markets going forward. DP World has been granted a concession
Somalia
that the Kuwaiti developer Agility plans While small by global standards, Africa’s to develop and operate a new logistics
to build across Africa, with Angola, Republic centre in Kigali. The first phase will be
online retail sector has started to grow of the Uganda
Côte d’Ivoire, Mozambique, Nigeria and Gabon Congo built on 90,000 sq m of land and will
at a fast pace, driven primarily by the Democratic comprise a 12,000 sq m container yard
Tanzania among its target markets. increased penetration of smart mobile Republic Rwanda Kenya
of the Congo and a 19,600 sq m warehousing facility.
Several major logistics and industrial devices. Pioneering online retailers
parks are in the pipeline as part of such as Nigeria’s Jumia and Konga
wider urban developments such as are building distribution networks that
Tanzania
Tatu Industrial Park
Rendeavour’s Tatu City near Nairobi and will require increasingly sophisticated Nairobi, Kenya
Roma Park in Lusaka. The areas around logistics properties.
Dakar Free Zone
Dakar, Senegal Part of the Tatu City urban development
Angola project, Tatu Industrial Park comprises
DP World has agreed with the Senegalese
Malawi 450 acres of serviced land suitable for
government to develop a logistics Zambia light industrial, warehouse and logistics
free zone at the new Blaise Diagne
uses. Unilever has signed an agreement
International Airport on the outskirts of
to acquire 70 acres of land at the park.
Senegal. The group already operates the Madagascar
Mozambique
Port of Dakar Container Terminal.
Zimbabwe
Namibia York Commercial Park
Agility Distribution Park Lusaka, Zambia
Botswana
Tema, Accra, Ghana Actis, in conjunction with the South
African developer Improvon, is developing
In October 2016, Agility opened the
a modern logistics park in the south
first phase of a logistics park built on a
of Lusaka. The park’s first phase was
45 acre site at Tema Free Zone, east
completed in early 2016.
of Accra. When fully built, the park is
expected to have 100,000 sq m of South Africa
warehouse space.
Port of Cape Town
12 13
Gambia
Guinea Chad Sudan
Bissau
Guinea
Sierra BeninAFRICA REPORT 2017/18 RESEARCH Soma
Leone Togo Nigeria
Ivory Ethiopia
Liberia Coast Ghana
Central Africa Republic
Camaroon
ALGERIA Equatorial
Guinea
ANGOLA
Uganda
Kenya
Gabon Congo
Oran
Rwanda
Key facts Key facts
Algiers Democratic
Constantine Republic of
Tunisia Population 39.7 million Population 25.0 million
the Congo Tanzania
Major cities: Major cities:
Morocco Algiers 2.6 million Luanda 5.5 million
Oran 0.9 million Huambo 1.3 million Luanda
Constantine 0.5 million Official languages Portuguese
ALGERIA Libya
Official languages Arabic Total area 1,246,700 sq km ANGOLA
Total
Egyptarea 2,381,741 sq km Huambo
GDP growth (2016) 0.0%
Zambia Malawi
n GDP growth (2016) 3.6% Key export Petroleum
Key export Petroleum Currency Kwanza (AOA)
Currency Algerian Dinar (DZD) EIU country risk D
Mauritania EIU country risk D rating (E=most risky) Zimbabwe
rating (E=most risky) World Bank Doing 182
Mali World Bank Doing 156 Business rank Namibia
Niger Business rank (out of 190 countries) Botswana
Office market Industrial market (out of 190 countries) Eritrea Office market Industrial market
Senegal Sudan
The traditional office locations in Algiers of Algeria’s oil-dependent economy Chad is Falling oil prices have had a dramatic Luanda’s main industrial and
Gambia Luanda prime rents and yields
Hydra and the city centre generally remain currently depressed and attempts to impact on Angola’s oil-dependent warehousing locations are in and around
Guineathe prime areas for local businesses. Benin diversify the economic base have had Algiers prime rents and yields Djibouti economy and the real estate sector. the port area and Viana to the east of
Guinea
Bissau However, international corporate occupiers only limited success. It is anticipated that
Prime rents Prime
Office demand in Luanda has virtually Souththe city. Historically, it has been very
Côte Prime rents Prime yields Africa
with Sierra
larger requirements have tendedTogo
to shift theNigeria
government will increase taxes and ground to a halt and supply has difficult to find good quality warehousing
d’Ivoire Ethiopia yields Offices US$80/sq m/month 14%
Leone
eastwards towards the airport and the new subsidised fuel prices in 2017, targeting increased, causing vacancy rates for new in Luanda, but the drop in demand from
CentralThis
African South Sudan
Offices US$30/sq m/month 10% Retail US$60/sq m/month 12% the oil sector and an increase in supply
commercial districts of Bab Ezzouar
Liberia Ghanaand businesses more than individuals. buildings to rise above 20%, with further
Republic Retail US$33/sq m/month 9% has caused the market to become more
Alger Medina. Banking, in particular, is will negatively impact
Cameroon Algeria’s appeal as Industrial US$10/sq m/month 14% increases expected in 2017. Luanda still
largely no longer headquartered in the city a manufacturing location and discourage Industrial US$9.50/sq m/month 13% Residential US$15,000/month* 11% has the highest office rents in Africa, but balanced. Rents and values have fallen
centre, with Natixis, BNP Paribas, Citi and international Somalia Grade A rents have almost halved in the by 30-50% in the last couple of years. In
Equatorial investment, which is already Residential Uganda
US$4,500/month* 7.5% Source: Knight Frank LLP
HSBC all now out to the east. Trust Bank and Guinea
deterred by restrictions on foreign Source: Knight Frank LLP Kenya *4 bedroom executive house – prime location last three years. The market has also the short-term, the market is expected
Al Baraka Bank also have new headquarters ownership. There areCongo several major *4 bedroom executive house – prime location been affected by recently-introduced to remain stable, but values should
under construction in Bab Ezzouar. The Gabon
industrial zones around Algiers including legislation prohibiting real estate rents increase once the economy recovers
Democratic
office market has been subdued over the Rouïba, Ouled Fayet, Birtouta and Dar Republic
El Rwanda from being set in, or linked to, a foreign and government initiatives to promote
of the Congo Burundi Contacts diversified industries have an effect.
last year as a result of economic uncertainty Beïda/Oued Smar; these are all practically currency. This has badly impacted
and many of the largest construction projects
Contact Peter Welborn, Managing Director, Africa
landlords who have typically borrowed
full and it is difficult to find good quality +44 20 7861 1200
Peter Welborn, Managing Director, Africa
have made slow progress. However, prime real estate. There is a pharmaceutical/
+44 20 7861 1200 Tanzania peter.welborn@knightfrank.com in US dollars but are now receiving their Residential market
rents have been stable, as the availability of biotechnology cluster at Sidi Abdallah, peter.welborn@knightfrank.com revenues in kwanza. As is the case in other real estate
Tim Ware, Managing Director, Zambia
space suitable for international occupiers 30 km south west of Algiers, where Sanofi sectors, high-end residential apartments
+260 211 250 538/250 683
remains limited. is building a factory. +260 211 255 992-3 Retail market and villas in Luanda are the most
tim.ware@zm.knightfrank.com The retail sector in Luanda remains at expensive in Africa, despite a 30-50%
Retail market Residential market
Angola a nascent stage of development, with fall in prices in recent years. Unlike other
Malawi
The informal retail sector is still predominant The prime residential area of Algiers is Zambia the majority of activity being either sectors, residential values were already
in Algeria, but a series of modern retail Hydra, which is also the main area of informal trading or in standalone units. in decline before the drop in oil prices,
developments have emerged over the last the city for the diplomatic sector. The International retailers, who were looking due to increased levels of new supply in
decade. The first of these was Sidar’s Al upmarket housing market has slowed in Mozambique at the market in 2013-14, have all but 2013-14. The prime residential market is
Qods in Chéraga, which has since been the last two years and rents have fallen, Zimbabwe disappeared. However, local investors dominated by the expatriate community,
Namibia Madagascar
joined by SCCA’s Centre Commercial Bab with the potential for further decreases have promoted the expansion of the who generally look to rent rather than
Ezzouar, Arcofina’s Ardis-Medina Center due to the depressed economic Mauritius mall operator Xyami, which is rolling buy. A four-bedroom villa on one of
and Chaïbi/Asicom’s City Center. These conditions. Lease renewals are beingBotswana out retail centres in Luanda and other the most sought-after compounds in
shopping centres are all performing well in agreed without review or at discounts to Angolan cities. There are currently Talatona can still fetch US$15,000
terms of occupancy and footfall, although previous levels. The Finance Act 2017 has fourteen shopping centres in Greater per month, but in 2014 the same villa
Algeria’s current economic challenges are raised taxes on landlords’ rental incomes, Luanda, mainly concentrated in the would have achieved US$25,000 per
likely to slow further development. Carrefour impacting the attractiveness of residential downtown and Talatona, where many month. Despite the weaker rental
South Africa
has recently re-entered Algeria but the investment. There is strong potential expatriates live. There has been a lack of market, yields have actually hardened
requirement to form a joint venture with demand for affordable housing and open market transactions, but anecdotal slightly, as investors have bought real
local partners is an inhibitor to the market government initiatives have attempted to evidence suggests that rents have fallen estate to hedge against inflation and the
Bab Ezzouar Mall, Algiers BESA Headquarters, Luanda
entry of other international retailers. encourage investment in this sector. by around 50% since 2014. devaluation of the kwanza.
14 15
of the Congo
Burundi
Tanzania Mauritania AFRICA REPORT 2017/18 RESEARCH
Mali
Niger
BOTSWANA Angola
Malawi
Senegal CAMEROON
Chad
Su
Zambia
Gambia
Key facts Key facts
Mozambique Guinea
Bissau Guinea Benin
Population 2.3 million Population 23.3 million
Zimbabwe
Major cities: Major Côte
cities:
Namibia Madagascar Togo Nigeria
Francistown Gaborone 0.2 million Yaoundé
d’Ivoire 3.1 million
Francistown 0.1 million Sierra Douala 2.9 million
Mauritius Leone
Official languages English Official languages French, English
BOTSWANA Total area 581,730 sq km Total area 475,440 sq km Central African So
Liberia Ghana Republic
Gaborone GDP growth (2016) 3.1% GDP growth (2016) 4.8%
Key export Diamonds Key export Petroleum CAMEROON
Currency Pula (BWP) Currency
Central African Douala
CFA Franc (XAF) Yaoundé
EIU country risk B Democratic Republic
South Africa rating (E=most risky) EIU country risk D of the Congo
World Bank Doing 71 rating (E=most risky)
Business rank World Bank Doing 166 Congo
(out of 190 countries) Business rank Equatorial Guinea
Office market Industrial market Office market industrial centre. However, there is also
(out of 190 countries)
Office supply continues to outstrip Demand for industrial space is focused on Gabon significant development activity further
Cameroon has some significant
demand in Gaborone and this imbalance units of less than 500 sq m, as tenants have south around Kribi, where a new deep-
Gaborone prime rents and yields advantages, having a good education
is likely to worsen for secondary space. started to use newly built business space Cameroon prime rents and yields system that produces high quality water port is under construction. The
With several large CBD office towers due as cheaper quasi-offices or showrooms. country is rich in natural resources with
Prime rents Prime employees and being both English and
for completion in 2017 and government The lack of strict planning controls within DOUALA significant industrial-scale agriculture
yields Prime rents Prime French speaking. However, a challenging
departments set on moving to new CBD industrial areas has enabled this trend. For including rubber, palm oil and coffee. The
Offices US$11.50/sq m/month 8.25% yields business environment has held back the
buildings, older and poorly located offices new warehouses under 200 sq m, rents stability of the local currency, which is
development of its office market. There
will be left empty with little expectation are now as high as 50 pula/sq m/month, Retail US$26.50/sq m/month 7.5% Offices US$26/sq m/month 10%
are hardly any good quality office buildings pegged to the Euro, is an advantage, as
that they will be taken up by the private close to half the level of fully-fledged offices. Industrial US$4.75/sq m/month 9% Retail US$46.50/sq m/month 8.75% is Cameroon’s geographical position and
and rents are flat. Douala is the main
sector. Fairgrounds Office Park remains Demand for larger space is dominated by Residential US$1,900/month* 6% Industrial US$4.50/sq m/month 12% commercial city, while the capital Yaoundé the potential to sell into the landlocked
the decentralised location of choice, quasi-retailers seeking prominent properties Residential US$2,800/month* 7.5%
Source: Knight Frank LLP has a much smaller corporate market which countries of Chad and the Central African
with rents around 20% lower than in the with good visitor parking. With Botswana *4 bedroom executive house – prime location
generally accommodates businesses that Republic. However, road networks are
CBD. Despite the perceived oversupply, reaching 50 years of independence in 2016, YAOUNDÉ
need access to government departments. relatively poor, which creates distribution
several occupiers with requirements for Prime rents Prime
many 50-year Fixed Period State Grant yields Office development has tended to be by challenges, and there are persistent delays
500-1,000 sq m are unable to secure
(FPSG) leases are nearing expiration and Contacts local individuals and businesses and is and other issues associated with moving
appropriate accommodation in the new Offices US$22/sq m/month 10%
industrial property owners are anxious to Curtis Matobolo, Managing Director below the standards required by global products through the port.
CBD buildings, and many high-rise Retail US$22/sq m/month 9%
see how the state treats requests to renew +267 395 3950 corporate occupiers.
towers with smaller floor plates do not Angola
FPSG leases. curtis.matobolo@bw.knightfrank.com Industrial US$2/sq m/month 15%
suit corporate occupiers. Residential market
David Watson, Director Residential US$2,800/month* 7.5% Retail market
Residential market +267 395 3950 Almost half of Cameroon’s population Zambia
Retail market david.watson@bw.knightfrank.com
Source: Knight Frank LLP
*4 bedroom executive house – prime location
There are only a small number of
lives in informal dwellings, and there is a
Gaborone has a diminishing supply of international retailers present in Cameroon
The retail sector continues to see new housing supply deficit estimated to be the
low-to-middle income housing, with most and most of these, such as Casino and
development, but demand for space has equivalent of 100,000 units per year. This
people on average incomes finding it difficult City Sport, are operated as franchises. Until
waned, with few new market entrants Contact will be compounded in future years as the
to locate affordable housing or finance their recently, there were no malls in Cameroon
and existing businesses contracting in Peter Welborn, Managing Director, Africa middle class swells and due to diaspora
own self-build homes. The drift to smaller but Douala has lately seen the opening
response to weak consumer spending. +44 20 7861 1200 demand. It is very difficult to get financing
and cheaper properties has been reinforced of L’Atrium, anchored by Spar, and Kadji Zim
Historically, mall developers have peter.welborn@knightfrank.com unless you are a government employee,
by an increased number of single-family Square, which has a Super U hypermarket.
targeted South African chains, who were Namibia
with funding mainly available through the
households due to growing student and The largest retail spaces in Yaoundé are
able to obtain exemptions to legislation
elderly populations. Many residential buy-to- mostly supermarkets or general stores government agency, Credit Foncier de
that limits the granting of certain trading
let investors are struggling to find tenants, such as Casino, Mahima and DOVV. CFAO/ Cameroun. With supply lagging demand,
licenses to local businesses. However,
particularly as expatriate workers have found Carrefour have targeted both cities, and are house prices are increasing,Botswana
particularly
a hardening of the government’s stance
it difficult to renew work permits. Demand most likely to open first in Douala, possibly at the mid-to-top end of the market where
meant that South African retailers were
unable to obtain exemptions throughout for multi-residential housing has increased as a standalone supermarket rather than a financing is a less important consideration.
2016. If this situation persists, it will and developers are increasingly tailoring mall-with-supermarket format. The best residential zones in Douala are
deter the development of new malls and schemes to the demands of average local Akwa, Bonapriso and Bonamoussadi.
landlords will have to target Botswana- buyers and tenants. Sales at the high end Industrial market In Yaoundé, the prime areas are mainly
based tenants, who generally occupy of the market are far less frequent and likely As the location of Cameroon’s main around Centre Ville, Quartier du Lac and
Zambezi Towers, Gaborone New office development, Yaoundé
smaller shops of less than 200 sq m. to stay muted for some time. port, Douala is the country’s principal Bastos/Golf.
South Africa
16 17
Algeria
Mediterranean Sea
AFRICA REPORT 2017/18 RESEARCH
co
Tunisia Western
Sahara
CÔTE D’IVOIRE
Algeria
CHAD Libya Egypt Mauritania
Key facts Key facts
Senegal Niger
Population 14.0 million Population 22.7 million
Mali Mali
Major cities: Major cities:
N’Djamena 1.3 million Abidjan 4.9 million
Niger Eritrea
Moundou 0.1 million Bouaké 0.8 million Guinea
Yamoussoukro 0.3 million Bissau Guinea Benin
CHAD Sudan Official languages French, Arabic
Official languages French
N’Djamena
Total area 1,284,000 sq km
Sierra
CÔTE Togo Nigeria
GDP growth (2016) -1.1%
Total area 322,463 sq km
Leone D’IVOIRE
Benin Somalia GDP growth (2016) 8.0%
Key export Petroleum Bouaké
Moundou Key export Cocoa Liberia Ghana
Togo Nigeria Ethiopia
Currency
Central African CFA Yamoussoukro
South Sudan Franc (XAF) Currency
West African CFA
Ghana
Central African Franc (XOF) Abidjan Came
EIU country risk D
Republic rating (E=most risky) EIU country risk C
Cameroon World Bank Doing 180
rating (E=most risky) Equatori
Business rank World Bank Doing 142
Office market Industrial market Office market Industrial market
Equatorial Uganda (out of 190 countries) Business rank
(out of 190 countries)
Guinea
Chad is consistently ranked as one of the Kenya The leasing of Green Buro in Cocody Much of Abidjan’s industrial activity is
Recent construction activity in N’Djamena
has largely related Guinea
to hotels andCongo
ministries, most challenging countries in the world Ambassades in early 2016, to tenants located in areas to the south of the lagoon
Gabo
Gabon in which to do business. As a landlocked including GE, Pfizer and ExxonMobil, near the port, such as Vridi, Zones 3 and 4,
rather than commercial offices. There is
a large area of the city which has been Rwanda
country with a relatively small and low- N’Djamena prime rents and yields Abidjan prime rents and yields established a new benchmark for prime and Koumassi. These traditional industrial
Zaire
income population, Chad is not a target areas are essentially at full capacity.
designated as the Cité Internationale des rents in Abidjan of XOF17,000/sq m/
market for international manufacturers, Prime rents Prime Prime rents Prime month. This confirmed Abidjan as the Occupiers are either in legacy real estate
Affaires, but it is unclear if this will present
and activity mainly involves local yields yields
opportunities to corporate occupiers and, market with the fastest rental growth in or need fast access to the port for import/
Tanzania
businesses involved with agri-processing.
if it does, this will not happen for several Offices US$55/sq m/month 10% Offices US$32/sq m/month 9% Africa over recent years. Several new office export activity. To the north of the lagoon,
In N’Djamena, industrial activity is mostly
years. The city’s office market is basic, Retail US$46.50/sq m/month 9.5% Retail US$46.50/sq m/month 8.75% developments have been announced by the most important industrial zone is
concentrated around Farcha where some
and purpose-built offices are generally not Industrial US$3.75/sq m/month 13% Industrial US$6.50/sq m/month 12% international developers, notably Actis’ Yopougon, where the majority of
of the oil companies have bases. There is
suitable for international companies. As Residential US$4,600/month* 8% Residential US$3,700/month* 8% Renaissance Plaza project in Plateau, but businesses are larger users processing
significant oil activity in the south and west
a result, such operations often work out of the country, where ExxonMobil has large no significant new supply will come to the local products. International companies
Source: Knight Frank LLP Source: Knight Frank LLP
of hotels and apartments where rents can market until at least 2018, putting further in this location include Nestlé and Cargill.
be very high at XAF30,000/sq m/month-
Angola operations. However, the government has *4 bedroom executive house – prime location *4 bedroom executive house – prime location
upward pressure on rents. Development Further north, Heineken and CFAO are
a history of tense relations with foreign
Malawi
plus. However, the local rate for offices is oil companies Zambia
and it recently imposed tends to be focused on Plateau, which is building a new brewery on the road to
around one-third, or less, of this. The US on ExxonMobil a fine equivalent to seven the established CBD where skyscraper Yamoussoukro, which will open in 2017
Embassy’s relocation to Dembé/Chagoua times the country’s GDP for the alleged Contact Contact construction is permitted, but many and give some critical mass to the proposed
is likely to spur the movement of other non-payment of taxes. Mozambique
Peter Welborn, Managing Director, Africa Peter Welborn, Managing Director, Africa international companies prefer Marcory PPP-funded PK24 industrial zone.
administrative functions to this area of +44 20 7861 1200 +44 20 7861 1200 and Cocody.
Zimbabwe peter.welborn@knightfrank.com
the city. Namibia Residential market Madagascar peter.welborn@knightfrank.com Residential market
N’Djamena saw a surge in the Retail market Upmarket residential development tends
Retail market Mauritius to focus on Zone 4/Bietry to the south,
development
Botswana of high-end villas and hotels The opening of CFAO/Carrefour’s PlaYce
There are no international retailers in in the run-up to the 2015 African Union Marcory in December 2015 gave Abidjan and Cocody and the Rivieras to the north.
N’Djamena, and the formal retail market summit, including a 60-villa compound at its first investment-grade mall, along with Recent years have seen the development
largely comprises small supermarkets Sabangali, and a residential development a variety of new and mainly-French retail of a significant volume of luxury apartment
alongside the Ledger Plaza hotel. However, brands. The same group is developing a buildings, and this trend is continuing.
selling imported products. Supermarket
the summit was cancelled due to the The market was boosted by the return of
brands include Modern Market, second mall to the north of the lagoon,
country’s economic crisis and, since the African Development Bank to Abidjan
Alimentation Générale and Alimentation known as PlaYce Palmeraie, which is
then,South Africa
construction activity has almost in 2014, but with the bank now starting a
La Tchadienne. The most significant progressing quickly and will open in 2017.
entirely halted. At the top end of the process of “decentralisation”, high-end
retail and commercial street in the city is The nearby Abidjan Mall opened in August
market, property is generally developed residential demand may be negatively
Avenue Charles de Gaulle. In early 2016, for owner-occupation or for leasing to 2016, adding further to the recent rapid impacted. Increased development
N’Djamena’s first mall opened opposite expatriates. The expatriate leasing market growth of Abidjan’s mall sector, which is outside of Abidjan is being encouraged
the Cité Internationale des Affaires, is currently dominated by the diplomatic now significantly ahead of other markets by improvements to roads and other
anchored by a 2,600 sq m Modern sector as oil companies have downsized in Francophone Africa. In the immediate infrastructure. Most of this is at the affordable
Market. However, this is still a fairly basic operations. Prime residential rents are future, any further construction activity is end of the market, with small plots being
development by international standards, around XAF1.75-2.5 million/month, which likely to comprise the upgrading of older bought for the construction of owner-
being essentially ground floor space is slightly down on a year ago, and the centres and new development in more occupied housing, but there has also been
New housing next to Ledger Plaza, N’Djamena PlaYce Marcory, Abidjan
under apartments. market is generally stagnant. peripheral locations such as Yopougon. a significant amount of speculative activity.
18 19Mali AFRICA REPORT 2017/18 RESEARCH
Niger
Sudan Eritrea
Chad
Djibouti
DEMOCRATIC REPUBLIC OF THE CONGO EGYPT
Benin
Togo Nigeria
Central African Ethiopia
Republic South Sudan
Ghana
Tunisia
Cameroon Key facts Morocco Key facts Alexandria
Uganda Somalia
Equatorial
Republic
DEMOCRATIC Kenya Population 77.3 million Population 91.5 million Giza Cairo
Guinea
of the REPUBLIC OF Major cities: Major cities:
Gabon Congo THE CONGO Kinshasa 11.6 million Cairo 18.8 million
Rwanda Lubumbashi 2.1 million AlexandriaAlgeria 4.8 million
Mbuji-Mayi 2.0 million Giza 3.6 million
Burundi Kananga
Western
1.2 million Libya EGYPT
Official languages Arabic
Kinshasa Kananga
Official languages
Sahara
French
Mbuji-Mayi Tanzania Total area 1,001,450 sq km
Total area 2,344,858 sq km GDP growth (2016) 3.8%
GDP growth (2016) 3.9% Key export Petroleum
Lubumbashi Key export Copper Currency
Egyptian Pound
Currency Mauritania
Congolese Franc (EGP)
Angola (CDF) EIU country risk C
EIU country risk D rating (E=most risky)
Mali
Zambia Malawi rating (E=most risky) World Bank Doing 122
Office market Industrial marketMozambique World Bank Doing
Senegal
177 Business rank Office market the currency devaluation will have on
Niger consumer spending. No new Eritrea
malls were
Business rank (out of 190 countries) A major issue affecting all property market
Office development accelerated after the Historically, prime industrial property
Zimbabwe Gambia delivered to the Cairo market in 2016,
presidential elections in 2011, but market (out of 190 countries)
Madagascar
Namibia has been located in the city centre and sectors is the floating of the Egyptian
activity has more recently slowed due to Gombe, resulting in relatively high rents.
Guinea Chad and the opening of the massive Mall of
Sudan
pound, which happened in November
uncertainty caused by the postponement Botswana
Mauritius Egypt (165,000 sq m GLA) was put back
However, more recent development 2016 and led to a sharp devaluation
of the next elections from 2016 to 2017. has generally occurred in the east of the Kinshasa prime rentsGuinea
Bissau and yields Cairo prime rents and yields against the US dollar. As a result, where to 2017. Prime rents for small retail units
New occupiers entering the Kinshasa city, in areas between the port and the rents are payable by local companies can be in excess of US$100/sq m/month,
market are rare, resulting in weak demand international airport. Industrial property Prime rents Sierra Prime Benin Prime rents Prime but rates for larger units are typically in the
yields yields
at a dollar equivalent rate, they have
for the space that is currently available. is clustered around the Route des Poids order of US$50-70/sq m/month.
Togo Nigeria effectively doubled in local currency
The prime area for offices is in the north of
SouthLourds,
Africa particularly in Kingabwa and Offices US$25/sq m/month 12% Ivory Offices US$35/sq m/month 10.5% Ethiopia
Leone terms. Some landlords have been forced
the city, with many of the most prominent Limete. Medium and large industrial Retail US$25/sq m/month Liberia
12% Ghana
Retail US$70/sq m/month 8.5% to cap the rate at which their rents are Industrial market
buildings being along Boulevard du properties are generally owner-occupied, Coast
Industrial US$15/sq m/month 15% Industrial US$3.50/sq m/month 12% converted to the local currency and it is The Industrial Development Authority
30 Juin. International companies with there is little speculative development, and Central Africa Republic
a presence include Ericsson, Orange, Residential US$10,000/month* 12% Residential US$3,500/month* 7.5% likely to be some time before the market continues to control and promote new
the leasing market mostly comprises basic Camaroon stabilises. Cairo’s main office areas are
Citibank, Elf, Vodacom, Nestlé and Source: Knight Frank LLP Source: Knight Frank LLP industrial activity in Egypt. It owns
second-hand units. Industrial rents in the
Alcatel-Lucent. Most of these have offices *4 bedroom executive house – prime location *4 bedroom executive house – prime location Downtown and New Cairo to the east significant areas of land which are
newer areas drop by as much as 50%
in Gombe, which is regarded as the most of the city. The latter offers commercial available for sale or lease. Land in
compared with the city centre. Much of Equatorial Uganda
secure area. Office buildings in Kinshasa and residential accommodation in a less outlying areas such as Upper Egypt may
the centrally-located industrial space can
are generally of a poor standard and many congested environment than the city Kenya
be expected to be gradually converted to Contact Contact Guinea centre even be offered free, while in other areas
lack air conditioning or elevators. Tim Ware, Managing Director, Zambia Peter Welborn, Managing Director, Africa Gabon Congoand a number of major companies
land is available at discounted rates.
office or residential use.
+260 211 250 538/250 683 +44 20 7861 1200 and bank headquarters are now located
Rents for industrial buildings are in the
Retail market +260 211 255 992-3 peter.welborn@knightfrank.com in this area. The government appears to Rwanda
Residential market tim.ware@zm.knightfrank.com be pressing ahead with Zaire
plans to create
region of US$2/sq m/month, and for
The Kinshasa retail market has shown warehousing are in the range of
limited progress in recent years. The With security concerns becoming more a new administrative capital to the east
acute, residential values have risen US$3-3.50/sq m/month.
10,000 sq m Le Premier Shopping Mall of New Cairo which may cause a further
opened on Avenue de la Justice in dramatically in the parts of Kinshasa shift in focus away from the city centre.
2016, while Conimmo has plans to build regarded as being safe. There has Prime city centre office rents are in the
ResidentialTanzania
market
the 32,000 sq m City Mall in Gombe. been a significant volume of apartment region of US$30-35/sq m/month, and Developers have reported good take-up
However, the massive and unfinished development, but the availability of drop to around US$25/sq m/month in New of residential units in high quality new
Gare Centrale mixed-use development standalone houses in good, secure developments, although to some extent
Cairo, albeit prime schemes such as Cairo
provides a reminder of the difficulties locations remains limited. The best
Festival City quote higher rates. this reflects the release of a decreased
of developing in Kinshasa. Shoprite residential areas are generally in the
number of units to the market. High-
is the only major international retailer north of the city and include Gombe,
Kintambo, Binza, Lingwala and Barumbu.
RetailANGOLA
Market end residential development is primarily
in Kinshasa, having a supermarket on
A number of relatively small developments The floating of the local currency has focused on 6th of October City and New
Avenue de l’OUA. Rents for ground Malawi
floor retail space are at a similar level to targeting expatriates have been completed caused additional issues for retailers, as Cairo. The devaluation of the Egyptian
Zambia
office rents, highlighting the immaturity of in recent years, and these have been they have not just seen rents rise in local pound will create issues in this sector as
the sector as a higher value is attached successfully leased. Prime rents are in the currency terms, but the cost of imported developers face increased costs in local
to ground floor retail units in more region of US$10,000/month, but drop off goods has also increased. There is currency terms and, as a result, may seek
Immeuble Tilapia, Kinshasa Maadi Technology Park, Cairo
advanced markets. dramatically outside of the safe areas. further uncertainty over the impact that to increase local currency prices.
Zimbabwe
20 21
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