Over the past 12 months we have noticed a sharp increase in the number of questions being asked about opportunities in African cities. As home to some of the world’s fastest-growing city economies, with rapid rates of urbanisation, a commodity and energy boom and increasing foreign direct investment, it is perhaps of little surprise that many African cities are now appearing on the radar of major corporations.
Africa is perceived by many observers as the ‘final frontier’ of commercial real estate activity, and a closer look at its cities reveals that many corporations, real estate investors and developers are already seizing opportunities, which is paving the way for others to follow suit … and it’s not just about responding to basic economic requirements. The strong expansion of brand-conscious urban consumers, who are looking for quality products and a modern shopping experience, is boosting mall construction in cities as far apart as Casablanca, Lagos and Lusaka … and international retailers are beginning to take note. Meanwhile the rise of mobile telephony and mobile banking is creating pockets of innovation, with Nairobi – Africa’s ‘Silicon Savannah’ – emerging as the regional powerhouse in mobile telephony innovation. Port Louis (in Mauritius) is evolving rapidly as an offshore banking centre, while cities such as Cape Town and Casablanca are building a critical mass of BPO activities. In addition, fast-growing cities such as Accra, Addis Ababa and Maputo are attracting strong interest from corporations, retailers and hotel operators.
Surprised? You shouldn’t be – but you’re not alone. Africa is often perceived as a continent plagued by conflict and corruption. Admittedly poor real estate transparency continues to constrain many of these cities, but operating environments are selectively improving and there are potentially huge pay-offs for those cities that can strengthen regulatory control and the fairness of transaction processes.
Interested in learning more? In response to the growing interest in the continent, we have launched a new research programme covering over 40 Africa’s cities. We are currently exploring Africa’s evolving urban network to assess how the changing environment is impacting on current and future commercial real estate requirements. Our aim is to identify Africa’s Winning Cities, and over the next few months we shall be releasing a series of short reports that provide new insights into this rapidly urbanising continent.