_Real estate most preferred asset for investment across the continent – Africa Report 2020
Nairobi, Kenya, 25th March 2020: Across the markets studied for the Africa Report 2020/21 by Knight Frank, the prime industrial sector remained relatively undersupplied with an increase in demand due to various economic diversification initiatives adopted by different governments.
The sector, however, recorded the highest yields compared to other sectors with an average of 12%. The online retail sector in Africa continues to grow to match the evolving needs, which is expected to result in increased demand for sophisticated and centralised warehousing facilities across the continent.
Tilda Mwai, Knight Frank Researcher for Africa said, “As the real estate markets in Africa become increasingly sophisticated, innovation has been at the core. What started as a trickle, through the introduction of online search platforms, has become a wave of disruptive and cutting-edge technologies that continue to improve both transparency and efficiency.”
The Africa Report 2020 also indicates that there are approximately 500 co-working operations, observed across African markets, 80% of which have come up over the past two years. Nairobi remains a major commercial hub and a favourite location for multinationals looking for regional headquarters and as such we will continue to see global occupier trends reflected in this market such as co-working and flexible spaces.
Affordable housing demand also continues to persist across the continent with the existing backlog estimated at 56 million units, with a financing gap of approximately US$1 trillion. Investments in satellite cities across the continent estimated at US$100 billion has resulted in the emergence of new prime real estate nodes.
Ben Woodhams, Managing Director, Knight Frank Kenya said: “The growth in the number of international developers and funds has led to increased segmentation among investors, with a dedicated focus on specific asset classes including hospitality and affordable housing sectors, as well as student housing.”
Africa’s economic cycles, geopolitics, and currency fluctuations continue to impact the real estate sector greatly. The sector continues to evolve towards sophistication as evidenced by the increase in prime real estate demand across all markets studied. Improvements in infrastructure connectivity and monetary integration are some initiatives expected to result in the key cities in Africa developing as global business hubs.
James Lewis, Managing Director Middle East and Africa at Knight Frank said, “Real estate remains the most preferred asset for investment across the continent for investors in their hunt for yield. Moving forward we anticipate a period of market correction and stabilisation in a majority of the markets in the short term but remarkable growth in the long term as Africa continues to grow.”
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The interactive version of the Africa Report is found here: https://view.digital-hub.global/the-africa-report-2020
For press inquiries, please contact: Cynthia Kimola, cynthia.kimola@ke.knightfrank.com, +254 723 174143
Notes to Editors
The Africa Report is Knight Frank Africa’s key flagship research report, outlining macro trends supported by microdata captured by our leading market research teams. The Africa Report 2020/21 provides unique Real Estate investment opportunities, detailed insights on 30 African countries and key market performance trends in the world’s most exciting continent.
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank has more than 19,000 people operating from 523 offices across 60 territories. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit knightfrank.com.