Besides facilitating job creation and greater competitiveness of African micro, small and medium-sized enterprises (MSMES) experts say there are also opportunities for real estate investors in the African Continental Free Trade Agreement (AFCFTA), a trade agreement in force between African countries.
The trade agreement, created as a crucial ingredient in lifting people out of poverty and invigorating the continent’s growth trajectory, has made Africa one of the biggest economic bloc in the world, meaning that the continent is now borderless such that businesses can now move from one country to another.
Free movement of businesses from one country to another means there will be increased demand for both residential and commercial real estate, including office, retail and industrial space in which investments could be made,” noted Mustapha Njie, CEO, Taf Africa Global, in an interview.
Taf Africa Global is a real estate investment firm with footprints in eight African countries including Nigeria, Gambia and Senegal. Nije believes that with AFCFTA, real estate investors could tap into the emerging opportunities in various countries which, according to him, are immense.
MKO Balogun, the chief executive of PFI Global, agrees, adding, “the free trade agreement allows entities across markets to explore opportunities across markets. Real Estate opportunities abound in most African countries waiting to be developed and tapped; many Sub-saharan African countries have shown huge potential for real estate.”
Balogun pointed out, however, that there were challenges. He explained that Nigerian real estate developers have had bad reputation of killing markets, citing Ghana where over investment by Nigerians have had negative impact on the local economy and created investor-apathy
“When Ghana real estate market started booming, Nigerians flooded and got involved and got the market clogged in recession; there were too many properties; value started going down. Govt didn’t do anything other than to direct that property should be valued in Ghana currency and not US dollar,” he said, recalling that he warned them in 2012.
Though Kenya is beginning to see falling demand and price decline, Ayo Ibaru, Director, Real Estate at Northcourt, insists Nairobi is still an investment destination, giving as high as 8 percent yield year-on-year on mixed use developments comprising office, retail and residential apartments.
Ibaru noted four nodes in Nairobi, the country’s capital, where because of developed infrastructure, demand is relatively high from the expatriates. They are also attracted by retail malls and security in those nodes which include Kiambu, Limuru, Ridgeway and Chinbingwa.
