Modupe Gbadeyanka
By Modupe Gbadeyanka
From tomorrow, Tuesday, November 16 to Wednesday, November 17, 2016, experts in the property investment industry in Africa and the world will converge in Accra, Ghana, for the annual West Africa Property Investment Summit.
They will meet to discuss the challenges, opportunities and the future of real estate in the West African region.
The event is expected to take place at the Kempinski Hotel in Accra, Ghana’s capital city.
Despite very often receiving less coverage than its powerhouse cousin Nigeria, the summit’s host nation has emerged as a powerful real estate investment destination, and a favourable endorsement from the World Bank as West Africa’s “best place to do business.”
Ghana seems to be on the upswing despite some significant struggles in 2014 and 2015. This followed IMF approval of a $116.2 million disbursement to the country, which has resulted into significant improvements in power supply, exchange rates and the local currency, the Cedi, which is stabilizing.
These changes, coupled with the emergence of significant improvements in the housing, retail and commercial sectors, and some pioneering mixed-use developments on the horizon present the possibility for a brighter Ghanaian future. These improvements make it far easier to believe the growing sentiment that Ghana is rising and Ghana is doing well. Ghana recently received a solid credit rating from Moody’s, which was followed by equally positive ratings by Fitch as well as Standards and Poors.
The West African retail market has been revolutionized over the past ten years. There has been considerable growth in the sector which has meant a significant change in the view of retail investment in the region. But recent economic challenges have made it difficult for the sector to continue to flourish in the same way as previous years. Even the best retail spaces are struggling to incentivize the right number of tenants, but the Ghanaian market has weathered this challenge by adjusting its tactics. Broll Ghana CEO, Kofi Ampong explains.
“To ease the increasing pressure on landlords, given the prevailing market realities of higher vacancy rates, some Landlords in order to drive occupancy in their malls have adopted a strategy of subdividing larger boxes originally meant for one tenant for use by multiple tenants in order to reduce vacancy rates,” he says.
In particular, the residential market in Ghana is at its most active in recent history, registering over 85,000 transactions a year over the past decade. However, with an abundance of new residential developments both in the pipeline and coming to fruition on the back of weakened consumer purchasing power, it is difficult to know whether the market will boom as a result, or suffer from oversupply in middle to high income housing. Despite some challenges, the summit will tackle the potential for the Ghanaian housing market, and the missing links still required. General Manager at Devtraco Limited, Elvin Larkai, remains positive about the sector’s outlook.
“There are massive opportunities for Ghana’s housing sector. Demand continues to grow and this serves as an added incentive for real estate investors. Unfortunately, a lack of reliable data is impeding progress. We need such data to improve our products and services to house hunters. This would also lead to a more thriving industry, contributing immensely to the country’s economy,” he says.
While the predominant focus on real estate rests in the commercial and housing sectors, some companies are turning their attention to blends between the two. Rendeavour’s Appolonia City development is one such example – as a 2250 acre mixed-use and mixed-income in the Greater Accra Metropolitan Area. The project is being developed for residential properties, retail and other commercial centres, as well as schools, healthcare and other social infrastructure. All local and national regulatory approvals have been met and a full land title certificate has been granted. The City has been planned to include key amenities and allow for the integration and flourishing of its two key elements.
“The combination of functions is the only way to create the quality people rightfully expect of urban developments in the 21st century. Mixed-use developments have been proven to stand the test of time and as future-proof real estate investments,” explains Holger Adam, Country Head for Rendeavour Ghana
While the 2016 election will play a major factor in Ghana’s trajectory, the landscape for investment is certainly more amenable than even just a year ago. With an internal structure being clearly established, and successful strategies and projects being implemented in the West African nation, current wisdom suggests the country will continue its upward real estate journey for some time.
