Economy
Investors, Experts to Deliberate on Africa’s Property Market
By Modupe Gbadeyanka
The African real estate narrative has shifted and evolved over the last 2 years with the impact of geo-political and economic challenges changing the property landscape. Moving forward, investors have come to realise that a more measured approach may hold the key to reaping long term rewards in Africa.
In order to address this new reality, API Events is hosting the 8th annual API Summit & Expo in Johannesburg on August 24 and 25, 2017.
“Africa is facing a new reality, but what does this mean for investors and developers looking to expand their growth and uncover new opportunities? Not only do we need to better understand this new reality, but also how best to approach it, realigning development strategies and investment models, all the while working together with new players in order to continue to develop and enhance Africa’s future property market,” says API Events Managing Director, Kfir Rusin.
Alongside this new era for the African continent comes a divergence in growth paths for two groups of economies. On one side we have Africa’s oil exporters, who have experienced sharp declines in growth, while Africa’s more diversified economies have continued to accelerate their GDP expansion. Despite these differing growth patterns from an economic point of view, the shift in real estate capital flows have yet to fully move over to East Africa, with long term investors still seeing the likes of Nigeria as a key market.
These changing fortunes, together with strict central bank regulations within individual countries, and the volatility of local currencies against the US dollar, have, however, made real estate funding a lot more complex.
“With modest recovery expected in sub-Saharan Africa (SSA) economies, prospects for improved real estate funding would increase where there are strong domestic governance policies and strong risk management practices. Attracting capital flows into SSA depends on the ability of individual nations to improve sovereign risk and growth prospects”, said Klaus-Dieter Kaempfer Barclays Africa’s Head of Commercial Property Finance.
The geography of opportunity within Africa has also evolved with French-speaking West Africa, particularly Ivory Coast, Senegal and Cameroon piquing new interest from an investment point of view, while East Africa continues to lead as Africa’s most stable frontier.
In this regard, companies like Mara Delta continue to focus on the long term fundamentals rather than short term volatilities, as seen with their own sustained and increased investments into countries such as Mozambique and Zambia over the last 2 years.
Bronwyn Corbett, Chief Executive of Mara Delta commented: “In addition to taking a view on political and currency risk, key considerations for us are the ability to conduct business in hard currency, the repatriation of funds, land tenure and the ability to raise debt. Based on these considerations, we have identified Uganda, Rwanda, Tanzania, Botswana and Ghana as potential territories for expansion. Our nodal expansion in-country depends on tenant demand, as you need some level of concentration in an area or region to make it economically viable.”
Looking ahead, there will be a definite shift in terms of sectors of interest and asset sizes. The office market has suffered a steady decline across the continent, while the retail sector is expected to continue to move towards convenience retail and smaller, more tailored retail centres across Sub-Saharan African cities.
Elaine Wilson, Divisional Director for Research at Broll Property Group says: “Some investors are getting wary of investing in the continent because of currency volatility especially in the retail sector due to dollar based rentals. East Africa is seeing an increase in formal retail space, however, financially strained consumers will still frequent informal traditional markets.”
On the other side of the spectrum, the demand for bigger and better warehousing space has increased significantly, with mega distribution warehouse projects kicking off in cities like Lusaka, Nairobi and Tema.
In terms of infrastructure on the continent, LAPPSETT, West African rail network and The Grand Ethiopian Renaissance Dam are expected to further influence the direction of Africa’s future going forward, boasting huge potential in unearthing new real estate opportunities across the continent in the current year.
The 2017 API Summit and Expo promises to delve in-depth into each of these topics, and more, with participation from over 35 countries, 600 delegates and 250 companies, providing insights, thought-leadership and solution-focused tools.
“Our understanding of Africa has changed over the last decade, and developers and investors alike are now ready to take a more measured approach to the continent, with a specific focus on attaining sustainable growth in the years to come. With this new understanding in mind, it has become vital for all industry players to come together, to learn from their peers, share their own on-the-ground experiences and forge new avenues for real estate growth in Africa,” Rusin says.
By Aduragbemi Omiyale
More petroleum marketers are looking to take advantage being offered by the Dangote Refinery in Lagos through its bulk-purchase incentives, allowing petrol stations to sell premium motor spirit (PMS), otherwise known as petrol, cheaper to motorists.
Recall that recently, Dangote Refinery entered into a deal with MRS Oil Nigeria, Ardova Plc, Heyden for the purchase of petrol at least two million litres at N909 per litre.
With this agreement, MRS Oil has been able to dispense to customers at a pump price of N935 per litre across its stations in Nigeria.
For those not under this arrangement, they have been battling with price instability, especially after depot owners recently increased their price to N950 per litre from N909 per litre because of the rise in crude oil prices in the international market.
Worried by this and attracted by the bulk-purchase agreement incentives of Dangote Petroleum Refinery, the Independent Petroleum Marketers Association (IPMAN) is already having talks to buy directly from the Lagos-based oil facility.
The national president of the group, Mr Abubakar Maigandi Garima, said members are eager to sign on with Dangote Refinery for the bulk-purchase agreement.
He argued that members could not continue to depend on depot owners for products when they can buy directly from the refinery bearing in mind that the minimum quantity to buy from Dangote Refinery is two million litres at N909 per litre.
The desire to be part of the bulk-purchase agreement, it was also gathered, was also apparently being fuelled by the testimonies from motorists who have been praising the impressive burn rate of fuel sourced from Dangote Refinery and sold in MRS filing stations which they said lasts longer compared to other products imported into the country and sold by others.
The management of the Dangote Refinery, citing economic relief provided by President Bola Ahmed Tinubu’s crude-for-naira swap initiative, had announced a bulk-purchase offer incentives to the three leading downstream sector operators, so that Nigerians could heave a sigh of relief on the reduced pump price.
By Adedapo Adesanya
The World Bank has projected a 3.6 per cent economic growth for Nigerian in 2025 and 2026 on the back of ongoing reforms by the federal government.
The Bretton Wood institution in its report titled Global Economic Prospects, January 2025 published on Thursday, said recent reforms, including subsidy removal, Naira liberalisation and the introduction of tax reform bills would help to boost business confidence.
“In Nigeria, Gross Domestic Product (GDP) growth increased to an estimated 3.3 per cent in 2024, mainly driven by services sector activity, particularly in financial and telecommunication services.
“Macroeconomic and fiscal reforms helped improve business confidence. In response to rising inflation and a weak naira, the central bank tightened monetary policy.
“Meanwhile, the fiscal deficit narrowed due to a surge in revenues driven by the elimination of the implicit foreign exchange subsidy, following the unification of the exchange rate and improved revenue administration,” a part of the report stated.
The World Bank noted that the wider Sub-Saharan Africa, to which Nigeria belongs would see a 4.1 per cent growth in the current year, before seeing a 4.3 per cent rise in 2026.
“Growth in Sub-Saharan Africa, SSA is expected to firm to 4.1 per cent in 2025 and 4.3 per cent in 2026, as financial conditions ease alongside further declines in inflation. Following weaker-than-expected regional growth last year, growth projections for 2025 have been revised upward by 0.2 percentage points, and for 2026 by 0.3 percentage points, with improvements seen across various subgroups. At the country level, projected growth has been upgraded for nearly half of SSA economies in both 2025 and 2026.
“Growth in Nigeria is forecast to strengthen to an average of 3.6 per cent a year in 2025-26. Following monetary policy tightening in 2024, inflation is projected to gradually decline, boosting consumption and supporting growth in the services sector, which continues to be the main driver of growth,” it added.
The global lender disclosed that oil production is expected to increase over the forecast period but remain below the 1.5 million barrels per day quota of the Organisation of the Petroleum Exporting Countries (OPEC).
By Adedapo Adesanya
Four price gainers helped the NASD Over-the-Counter (OTC) Securities Exchange close higher by 0.35 per cent on Thursday, January 16.
The value of the trading platform jumped by N3.69 billion during the session to N1.072 trillion from the N1.068 trillion it closed in the preceding session, and the NASD Unlisted Security Index (NSI) made an addition of 10.67 points to wrap the session at 3,103.83 points compared with 3,093.16 points recorded at the previous session.
Industrial and General Insurance (IGI) Plc added 3 Kobo to its price yesterday to trade at 33 Kobo per unit compared with Wednesday’s closing price of 30 Kobo per unit, Newrest Asl Plc appreciated by N2.85 to N31.18 per share from N28.53 per share, 11 Plc gained N2.90 to close at N256.00 per unit versus the N253.10 per unit it finished a day earlier, and FrieslandCampina Wamco Nigeria Plc grew by 21 Kobo to N39.16 per share, in contrast to midweek’s N38.95 per share.
On Thursday. there was an 85.3 per cent increase in the volume of securities traded by investors to 1.2 million units from the 666,494 units recorded in the preceding session, the value of shares traded surged by 8.9 per cent to N18.0 million from N16.5 million, and the number of deals leapt by 65 per cent to 33 deals from 20 deals.
FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 3.4 million units worth N134.9 million, trailed by Geo-Fluids Plc with 8.9 million units sold for N43.0 million, and Afriland Properties Plc valued at 690,825 sold for N11.1 million.
IGI Plc closed the day as the most active stock by volume (year-to-date) with 23.5 million units sold for N5.3 million, followed by Geo-Fluids Plc with 8.9 million units valued at N43.0 million, and FrieslandCampina Wamco Nigeria Plc followed with 3.4 million units worth N134.9 million.
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