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The competition for land in Africa

The competition for land in Africa

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As a sector that has one of the highest rates of return for investment in Africa, real estate continues to stir international interest. Faced with the saturation of the market of which the European and American sector has fallen victim, predictions are subsequently aligned to attract Western investment on the African continent. Less congested and with strong opportunities, Africa arouses a particular kind of attention.

Real estate, state of the art in Africa

Both African and international investors are taking advantage of the strong growth of African towns and this trend shows no sign of slowing in the coming years; the African population is undergoing significant demographic changes, particularly in the sub-Saharan continent, where the population is expected to double by 2050. With this spike in numbers, an inevitable and massive urbanization will of course occur.

A growing number of major players in distribution are looking for new business premises to implement their brands in Africa, especially in emerging cities. However, real estate insiders are conscious of various obstacles that for now, remain consistent in African territory. Despite the growth in the Tech and Oil & Gas sectors, jobs that are specifically created for developing regions remain inaccessible simply due to the inability to house employees within close proximity. In cities, real estate agents have clearly identified these needs and challenges, both in terms of providing better access to affordable housing as well as high-end properties.

The value of the city, both big and new

Certain African countries with strong real estate potential are offering the best investment opportunities and such is the case for the biggest cities in the continent. Investors therefore focus mainly on large cities such as Cairo, Luanda, Lagos, Kinshasa, Johannesburg or Port Louis.

As a result, we are witnessing the creation of the African "Smart City" - real "new" cities created from scratch. These cities come into being by developing a new urban district and mixing in private residences, shopping centers, private clinics and many others. Part of this new city trend is the emergence of urban development projects that are located on the outskirts of major cities, such as the likes of "Tatu City" in Nairobi and "Eko Atlantic" in Lagos.

Meeting the increasingly demanding expectations of current and future populations in terms of real estate represents a major challenge today in Africa. There can be therefore little doubt that the real estate sector is in the midst of an exciting growth in Africa and highlighting the continent's growing prospects for local and international investors and developers is now being listed as a priority for African states.

For any questions regarding the real estate sector in Africa and Indian Ocean, or hiring needs within this region, please contact Delphine Binsse, Middle East & Africa Consultant, at delphine.binsse@morganphilips.com

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