The African real estate market is expected to normalise and bounce back to pre-Covid-19 levels by Q1 2023. This is according to Malcolm Horne, CEO of Pan-African professional real-estate services provider Broll Property Group.
Many of the trends dominating the international real estate market at present were already prevalent or on an upward tick prior to Covid-19. “A lot of the trends we have seen, whether globally or in Africa, had their roots before the pandemic. It was not a case of Covid-19 suddenly leading to massive change. It did accelerate market trends, especially as the sectors benefiting now had already started to grow prior to Covid-19.”
Looking at the international real estate market, Horne says the obvious winners at present are industrial, data centres and lifestyle, the latter focused on well-being and healthy living, in addition to healthcare. “These have done very well. However, if you compare it to Africa, they have fared equally well.”
Thus, there seems to be a real correlation across the board between those resilient sectors that have stood out. In Africa, industry, data centres and hospitals have been at the forefront of much development. Secondary emerging investment sectors that are rapidly gaining traction include cold storage, self-storage facilities and affordable housing.
“The real challenges lie in offices, retail and hotels,” says Horne. In the case of retail, the sector continues to attract investment. “Yes, there have been major retailers exiting some African markets, but if you look at the international trend, a lot of landlords have actually invested in retailers in order to get them going again. We have observed a similar trend in Africa in terms of a resurgence of local investor interest in the retail sector.”
In terms of the office sector and the global ‘work from home’ phenomenon, while a general return to the office environment is predicted by Q3 this year, with a hybrid model most likely to be adopted, Africa is an interesting exception. “Due to the slow rollout of vaccines across the continent, a lot of companies are still working remotely.”
