Emerging markets offer unique and individual challenges for real estate investors, and monitoring data to identify the most popular emerging economies is not an easy task.
However, a new report by real estate researchers at Cushman & Wakefield has ranked five African markets in the top 10 of the most transparent emerging economies.
According to Cushman & Wakefield’s latest annual Emerging and Frontier Markets report (2015), a 55-page study that provides investors with overviews of the office market and relevant property indicators for 42 countries globally – from Angola to Zambia – Africa dominates the top 10 rankings through South Africa (3rd), Ghana (4th), Morocco (8th) and Tunisia (10th) – in addition to Botswana in southern Africa that retains its 2014 top ranking.
Reasons cited for Africa having secured half of the top 10 most attractive emerging market locations include a growing middle class population, better infrastructure and technological improvements in a number of countries possessing transparent real estate markets.
“Emerging markets are often mistakenly viewed as homogenous,” says Richard Middleton, Head of Account Management & Client Services, Global Occupier Services EMEA, Cushman & Wakefield. “However, in reality real-estate dynamics vary considerably as do the sets of risks and opportunities on offer for occupiers across differing geographies and business sectors.”
And, as emerging markets become increasingly integrated into the global economy it’s important to remember the sheer size and diversity of developing economies. Middleton adds: “Africa is a good example of this with countries [across the continent] offering very different operational profiles. Real estate strategies [consequently] need to reflect this.”
One of Africa’s up and coming markets is the Western Regional capital of Sekondi-Takoradi in Ghana. The city’s status has burgeoned in recent years with the discovery of oil in the Western Region, with foreign and local oil companies taking the opportunity to tap the newly discovered ‘black gold’.
Demand for both commercial and residential properties in the city has risen exponentially as a result and with an abundance of other natural resources such as gold, timber and cocoa, Sekondi-Takoradi stands in good stead to be one of the giants of Africa.
The same is true over in Casablanca in Morocco where the country’s industrial and business centre has become home to numerous Moroccan and international companies, taking advantage of its close proximity to Europe and international trade routes.
The dynamic city is increasingly attractive to Morocco’s young population, looking to settle down in a modern area with an abundance of employment opportunities.
The city is seeing a number of commercial development projects taking place to improve the retail and entertainment facilities on offer, additional incentive for savvy property investors.
With pockets of economic growth emerging across the African continent, it’s no surprise that real estate in those markets is beginning to boom. Africa has become particularly appealing to large scale investment from China in 2015, which has brought considerable buoyancy to real estate markets in key investment areas across several African countries.
There is significant growth potential in several of Africa’s emerging property markets that combined with demand levels outstripping supply is likely to see increasing property prices in the near future. However, with rising affluence in key cities that are expanding and growing, buy-to-let investment opportunities will be sharp in the focus of the savvy investor seeking high-yield opportunities.