Developments are well under way along Mozambican capital Maputo’s beach-facing Marginal Avenue, for example, where new skyscrapers vie for space next to old ones.
Expensive apartments and office blocks under construction define the CBD and stretch all the way to Costa do Sol in the east and Matola in the south.
With the continent’s current infrastructure deficit, it can be expected that such sights will remain.
Sub-Saharan Africa’s infrastructure development projects currently total a minimum of $100bn, according to Lyal White, director of the Centre for Dynamic Markets at the Gordon Institute of Business Science (Gibs). Property development, including residential, shopping space, industrial zones and hotels, among others, is central to this number. Hence the sustained interest in the ?property sector.
The discovery of large deposits of natural resources, such as gas, in Mozambique, Tanzania and elsewhere will help push the real estate industry even higher, delegates heard at the African Property Investment Summit (APIS) held in August.
Funds pour into the sector
Private equity funds and governments have also come on board. For now, up to half of funds are sourced from South African entities, with investors from North America, Europe and the Middle East making up the balance, according to Lagos-based Adeniyi Adeleye, Stanbic’s head of real estate finance in West Africa.
Active players include Atterbury, Old Mutual, Sanlam and Resilient – which in August completed construction of a 14?000m2 Delta Mall in Warri, about 400km southeast of Lagos, a $60m project (with tenants like Shoprite, Truworths and telecommunications firm Airtel).Resilient is due to complete other slightly smaller malls, in Asaba and Owerri in the same region, between now and next year, while a few more are in the pipeline.
Overseas firms active on the continent, noted Adeleye at APIS, include British firm Actis and Dubai-based Emaar Properties and private equity investor Abraaj. The Financial Times reported earlier this year that Abraaj had raised $375m for a fund targeted at North Africa.
That, including capital raised for projects in sub-Saharan Africa, brings the total to $1.4bn – a record in any one year.
This article originally appeared in the 22 October 2015 edition of finweek. Buy and download the magazine here.