Africa faces a critically important 2017, and while real estate occupiers and investors have both been accustomed to years of high-growth rates above global averages, the potential economic and political headwinds could lay the foundation for a new way forward in Africa.
This is according to Malcolm Horne, Group CEO for Broll Property Group, a commercial property services company, who says it is often in the diversity and complexity of a situation that the solution is to be found.
“Faced with potentially turbulent times ahead, the journey will not be easy and decisions will often be very difficult at a political level. But, if the correct direction is chartered, Africa will remain a continent of diverse opportunity,” says Horne.
Speaking ahead of the 8th Annual Africa Property Investment Summit (API), which will take place on 24 and 25 August 2017 at the Sandton Convention Centre in Sandton Central, Horne will reveal several new trends that will play a significant role in reshaping Africa and the potential opportunities for real estate investments in future.
“Last year produced several unexpected events like Trump and Brexit, and we will see the impact on Africa in the years ahead. Sub-Saharan Africa will also need to be able to deal with the dynamics of having its average growth rate being equal to or less than the global average for the first time since 2001,” says Horne.
“From 2001 to 2008 Africa saw a growth rate of 5.9%, dropping to 4.1% from 2009 to 2016, and since 2013 a consistent average year-on-year decline has been recorded.”
How will this affect Africa as an investment destination for occupiers and investors?
Sharing a glimpse into the retail sector, Horne says while there are new brands continuously entering the African market, many retailers are still adopting a wait-and-see attitude in countries affected by the current downturn in commodity prices.
“Technology is forever evolving in all sectors of the property market, and role players in the property market need to adapt accordingly. For example, the banking sector’s physical asset strategies will closely leverage their digital and online strategies. The increased uptake of mobile, online and alternative channels by bank customers is resulting in physical property dialogues,” he says.
“A number of shopping centres across the continent have also implemented Wi-Fi and apps, while online shopping is becoming more popular. Lower smartphone prices and data costs are driving the digital revolution in Africa.”
Addressing what can sometimes be the biggest barrier for potential investors, Horne says the ease of doing business in Africa has improved, with increased exposure to international companies entering Africa and a drive by many countries to make it easier to set up businesses in-country.
“However, while positive inroads have been made by a few countries, there is still a long way to go, with the majority of countries having mixed success,” says Horne.
Broll Property Group is the main sponsor for this year’s summit, and due to the company’s presence in sub-Saharan Africa, Horne says there is great value in their partnership with API and the exposure it provides to the sub-Saharan African market.
“To create sustainable property investment and development opportunities across Africa, we need to collaborate, share experiences and knowledge and navigate the unique challenges the continent presents to investors and developers together,” says Horne.
“We are committed to driving growth in Africa’s real estate market, and we are thrilled to once again align ourselves with a brand like Broll, which shares the same belief and commitment to African growth,” says Kfir Rusin, managing director for API Events.