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Market Overview

Africa’s Awakening Real Estate Market

Africa’s young population will drive the demand for real estate and different types of real estate. Across Africa there will be continued urbanization, an expansion of current cities and the rise of new cities.

Huge expansion in cities, with mixed results:

By 2020, the twenty first century’s great migration to the cities will be well underway. Cities will be swelling across the fast-growing countries in Asia, Africa, the Middle East and Latin America. Even the developed Western nations will be urbanizing, albeit at a slower pace. But not all cities will prosper. While some will become great centres of wealth creation in a multipolar world, others are likely to fail.

Unprecedented shifts in population drive changes in demand for real estate

Demographic shifts will affect demand for real estate fundamentally. The burgeoning middle-class urban populations in Asia, Africa and South America will need far more housing. Meanwhile, the advanced economies’ ageing populations will demand specialist types of real estate, while their requirements for family homes will moderate.

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‘Sustainability’ transforms design of buildings and developments

Cities contribute an estimated 70% of the world’s energy-related greenhouse gases while occupying just 2% of its land. Their locations – often in low elevation coastal zones – and large populations make them particularly vulnerable to the impacts of climate change, such as rising sea levels. As the world rapidly urbanizes, so the pressures to make buildings more eco-efficient are mounting.

Real estate capital takes financial centre stage

Private capital will play a critical role in funding the growing and changing need for real estate and its supporting infrastructure. Just as asset managers, real estate funds and sovereign wealth funds (SWFs) find the assets under their control swell, so governments will have an increasing need for capital to finance urbanization. Private real estate capital will become an important partner of governments.

Technology disrupts real estate economics

Technology is finally coming to real estate. By 2020, technology will have both altered the economics of entire subsectors of the industry, and changed the way that real estate developers and the investment community operate.

Opportunities expand but execution remains a concern

In spite of having a great financial status, demand and expansion opportunities into the real estate projects in Africa, procurement planning remains a concern.

The challenge lies in getting the right material at the right time within the budget, if this is not addressed it will lead to prolonged negotiation cycle with new budget and schedule. The result will no doubt be a project delay and hence a cost overrun.