Opportunities in Africa despite global market conditions

19 June 2009

London, UK – Despite the global recession, Africa provides property investment opportunities with the rapidly developing telecommunications, mineral extraction and energy sectors fuelling growth according to Anne Porter Knight Frank’s Africa Report 2009.

Anne Porter Knight Frank’s Africa Report 2009 provides a guide to markets in 33 African countries, covering cities from Cairo to Cape Town, and Dakar to Dar Es Salaam. The report includes prime property rental values and yields across all sectors, as well as commentary on current market conditions and outlook.
Highlights include:
·         Many countries are experiencing a lack of the high quality office space demanded by international corporate occupiers. In a number of markets, especially those with economies driven by the oil and gas sectors, prime space commands some of the most expensive rents in the world. Rental values in Luanda in Angola are comfortably above those in most of the world’s major financial centres, ahead of London, Paris and New York and lagging behind just Tokyo

·         Whilst the lack of supply in some markets has driven prices to first world levels, there are great disparities between rental values:

Luanda in Angola and Lagos in Nigeria have amongst the most expensive rents in the world at $140.00 and $65.00 respectively per sq m per month

Whereas, Blantyre in Malawi and Nairobi in Kenya have prime office rental values in the region of $9.00 per sq m per month

·         The continuing growth of the middle class in key African markets provides the private sector with growing opportunities. In response to the growing aspirations and increasing spending power of the consumers in Africa, the presence of international retailers is on the rise. The shopping mall concept, already in its maturity in South Africa, is being developed dynamically in other parts of the continent with new malls entering operation or nearing completion in several cities, including Nairobi and Kampala in the East to Accra and Dakar in the west

·         The requirements of international business occupiers are challenging to fulfil.  Infrastructure remains underdeveloped in a great deal of the continent and high levels of congestion blights many city centres, resulting in the outward migration of businesses from traditional CBD locations. Markets are opaque, with reliable information difficult to come by and the need to build relationships on the ground is essential

·         The value of the resources held in Africa is reflected in the growing relationship between China and Africa’s governments, as the Chinese seek to secure raw materials for its own rapidly expanding industrial sector
Joe Simpson, head of global research, Anne Porter Knight Frank commented: “Africa presents a unique combination of both challenges and opportunities. The continent’s rich array of resources is hugely attractive to international businesses and will play an increasingly important role in international trade in the years to come. The demand for these resources around the world, combined with the lack of high-quality business space in many countries, has seen an escalation in rental costs in a number of cities as supply has struggled to keep pace with demand.”
Peter Welborn, head of Africa and Rutley Corporate Finance, commented: “In response to the growing aspirations and increased spending power of the new middle-class in key countries, the presence of international retailers is on the rise and the shopping centre concept is spreading. Retailing in a shopping centre environment is now common in countries like Kenya, Nigeria and Ghana. Big chains from South Africa have crept up the continent bringing with them a whole new kind of western shopping experience.
For a copy of the report please contact Carly Tompsett at carly.tompsett@knightfrank.com
For further information, please contact:
Joe Simpson, head of global research, Knight Frank, +44(0)20 7861 1728
Peter Welborn, head of Africa and Rutley Corporate Finance, +44(0)20 7861 1200
Naomi Curtis, commercial senior pr executive, Knight Frank, +44(0)20 7861 1744