Real estate in Africa in demand

Africa's young population as well as continued urbanisation will drive the demand for real estate on the continent.

This is according to a report released in Johannesburg yesterday by consulting firm PwC, titled Real Estate: Building the Future of Africa.

"Africa represents 15% of the world’s population but only 3% of the global GDP [income],” said Ilse French, the real estate leader at PwC, on the growth potential of the continent.

“More and more, investors around the world are seeing the growth potential of Africa, in particular its substantial demographic edge. Economic growth, improving political stability and ongoing investments in infrastructure are opening up a previously inaccessible market,” added French.

The report projected forecasts of 20% net annual returns from investments in shopping malls, office blocks or industrial complexes in countries across the continent to draw in new investors.

The retail sector is leading the South African property market. This is attributed to the rise in the country’s middle class, with an average disposable salary of $1 100 (about R13 607) a month in the formal sector, which is rapidly growing.

South Africa is also included for the first time in the Global Real Estate outlook for 2015, also by PwC. The report provides insight into the current African real estate sector by focusing on the key markets through a series of interviews with leading players in the industry who provide their view and outlooks on the investment climate.

Source: Fin24