Despite a year in which a number of events on the African continent served to further entrench 'afro-pessimism', investment opportunities are still to be realised. South African retailers and financial-services corporates have taken the lead in expanding operations into Africa. This is owing to a number of push factors such as the perceived saturation of local South African markets and generally high levels of competition. The pull factors include the potential of unexplored markets, dollar-based rentals and returns, increasing synergies with foreign business ventures, and in the case of South Africa, psychological and geographical proximity.
Property investment remains an area where local country pension funds and insurance operations are generally well established, leaving little room for foreign investors to manoeuver. Financing of projects is also often cited as a major barrier to investment. As such there are a number of issues to be dealt with by investors/developers and property practitioners considering a move into African property markets - chief among these are:
· Preparation of extensive and diligent research
· Establishing credible professional business relationships with local Joint-venture partner/s
· Cross-cultural training and language proficiency
· Retaining the services of knowledgeable attorneys and accountants
· Establishing project financing options/avenues
· Engaging in ongoing risk management strategies
· Establishing and transferring intellectual property through skills transfers
· Ensuring that clear exit strategies exist

The following provides a brief overview of dynamics within some of the key African markets:
Botswana
Botswana is one of the most stable prime emerging African markets. Prime commercial property supply has been limited but this is set to change with an increase in recent new developments. Property finance is readily available from local institutions and South African funders. Annual built in escalations of around 11% provides for rapidly improving returns over the initial years of investment. Prime office rentals stand at about US$10/m²/month, payable in the local currency equivalent and comparable to 'A' grade SA properties. Like many markets, decentralised developments are occurring and rising rents have served to increase demand for owner-occupied premises. As such, office development in the form of office parks, will be absorbed by demand. An opportunity for effective property management is available. Prime and well-located retail space demand is strong and current supply is typically taking shape in the form of neighbourhood centres anchored by South African retailers, such as Riverside Mall/Pick n Pay. A gap for a regional shopping centre exists in the fast developing residential suburbs to the north-east of Gaberone. City centre shop rentals are around the US$15/m²/month range for 250-300m² outlets.
Ghana
Although ranked sixth in the Africa Competitiveness Report, Ghana faces many economic problems, including high inflation and crippling interest rates (45% bank lending rate). The latter impacts on property financing which has to be sourced from foreign debt and equity - given that local institutions participate to a lesser extent. The government has set itself targets for 4% GDP growth and an annual inflation rate of 25%. Property opportunities will undoubtedly be focussed on the (eco/heritage strong) tourism sector that has achieved tourist visitor growth of 16%-30% per annum in the past five years. To date, significant private investment has been made in upgrading the hotel industry. The Accra CBD accounts for most of the retail combining a mix of formal and informal trading. With prime retail locations yielding monthly rentals of up to US$20/m²/month, there is a requirement for a regional type shopping centre located on the fringe of the city. An oversupply of decentralised prime office space exists; typical rentals are between US$15-18/m²/month gross.
Kenya
Nairobi is a well-established property market with ongoing developments occurring - particularly dominated by Government bodies. Furthermore, a fairly active securities exchange has promoted the growth of a number of locally listed global trading companies. Prime office CBD rentals stand at about US$8-10/m²/month net of operating costs. Decentralisation has been actively promoted and controlled since the early 1990's and has been particularly popular with corporate tenants where prime rentals stand at about US$12-15/m²/month. Institutions tend to be the principal investment players in the property market and their property portfolio weightings tend to be high. Should this allocation change in line with international benchmarks of below 10%, the investment market will be trading actively in the future. This will however be dependent on the availability of more affordable long-term financing. Office Park Development opportunities exist. Retail is spread throughout the city centre in the form of mixed-use facilities and demand for decentralised retail centres continues to grow, with a number of modern centres being established. There has been good growth in retail rentals and a narrowing CBD/decentralised rental gap has emerged.
Mauritius
In the recently released Africa Competitiveness Report, Mauritius is rated as the second most competitive country, from a previous 3-year top rating. It continues to expand its economy with significant contributions from manufacturing, financial and business services, trade and tourism. It is the latter two aspects of the economy, which are particularly appealing for the property investment and development market. Leisure related projects focussed on 'shoppertainment' and situated at strategic waterfront locations have attracted much local and international interest. Retail developments focussing on the local market is seen as an important area of opportunity. Although 'free-trade' benefits are often cited, tariff barriers have limited a flood of foreign retailers into the market - especially in the apparel range of goods. Properties do not trade and are tightly held by local commercial/family conglomerates. There is also demand for prime office space in the capital of Port Louis where gross rentals stand at about US$18-20/m²/month.
Mozambique
The recent bouts of floods has had an impact on the government's ability to contain inflation and stimulate long-term growth; this during a period in which the economy had been growing at record double-digit levels prior to the disasters. However, foreign investment continues to flow into the capital, Maputo and phase II of the mega $1.8 billion project - Mozal - has been commissioned. In addition, a number of other major infrastuctural projects are planned or are being currently implemented. As such medium and long-term economic growth prospects are looking up. Prime office and retail developments are in strong demand and with the increased number of new hotels being completed, tourism has been further stimulated. A-grade office rentals can command between $15-18/m²/month. Retail rents fetch $10-20/m²/month, whilst hotel based retail is higher at $25-30/m²/month
Nigeria
Locally based commentators describe the Nigerian Property Market as volatile and risky; yet real lucrative opportunities for international investors can be achieved. Among some of the key factors influencing the market is inflation and exchange rate stability, the scarcity of property developers and specialised services, and an absence of mortgage policy and functioning financing institutions. There are cities such as Lagos, Abuja, Port Harcourt, Ibadan and Enugu, where in general, lower grade office supply is regarded as over-saturated. Selected locations for business suites still provide for profitable returns. In addition, opportunities in real estate are ascribed to a number of sectors, including mass housing; exclusive low-density residential estates; leisure/recreation facilities and mega shopping complexes. Lagos office rentals vary from approximately US$3.5 - 7/m²/month in Ikoyi to US$2.5 - 8.5/m²/month in new town suburbs such as Victoria Island. Retail space tends to have a higher minimum level but similar upper rental levels to office space.
Tanzania
Dar es Salaam has emerged as a prominent East African Port and Commercial City in the East Africa bloc. The CBD has been expanded to the north and west with fairly significant speculative investment developments propagated by both public and private bodies, with financing (albeit extremely difficult to raise) tending to be in the form of foreign loans and equity. Office leases vary between five and ten years. Prime new offices are leased for about US$16/m²/month net and older CBD offices between US$10-12/m²/month. Ground floor street-front shop units dominate retail supply, together with informal traders which operate throughout the city and suburbs. New decentralised developments are planned in the northern decentralised suburban reaches of the city; along the Masasani Peninsular asking rentals are between US$ 15-20/m²/month. Opportunities in the retail and decentralised office genre exist.
Uganda
In the city of Kampala, new office development has emerged alongside fairly significant renovations and upgrading of existing stock. The bulk of supply however is provided in badly managed and inadequately maintained buildings affected by poor infrastructural amenities. As a result and owing to limited supply of quality office space, relatively high rents have been achieved in prime space. Unlike Kenya, institutional investment in property is rare, and long-term finance is also scarce. Prime CBD office rentals, exclusive of operating costs, stand at between US$10-16m²/month and are significantly higher in exclusive facilities such as the Sheraton hotel office suites. In general, the retail market is unsophisticated with SA retailers tending to have a strong impact on the market - with two supermarket chains currently in operation. New centers are emerging in the north-eastern residential suburbs; the largest current scheme comprises 15000m² of retail. CBD High street rents range between US$ 10-14/m²/month. On the Industrial front, the government together with its investment operation arm, are promoting the establishment of an Industrial Development Zone focussing on manufacturing and export-led activities and trade.
Although not in the top six improved/optimistic countries in the African Competitiveness Report, Zambia certainly is shifting from one of the poorest to a promising emerging market. Its privatisation programme has been heralded as a success and a new opportunity in the copper industry is serving to raise investor optimism in the country. The dollar quoted property market constitutes a small, prime segment of the market dominated by large companies. Lease lengths are generally two to three years, with retail facilities commanding five-year terms. The Lusaka CBD has seen few major developments in the past ten years; however as existing stock is generally in a state of poor maintenance, certain new office refurbishments are on the cards. Prime Rentals in the CBD and surrounds are around the US$9.50/m²/month, whereas secondary space fetches rentals of around US$4/m²/month. Companies seeking improved working environments have tended to relocate to residential suburbs to the east of the CBD. Development and investment opportunities exist for office parks. The retail market is relatively under-developed with strip-shop conversions being popular. Manda Hill, a decentralised shopping centre has been completed in a northern up-market suburb. Being the only international quality centre, rentals are around US$15-20/m²/month through rate. Prime arterial retail rentals sit at about US12$/m²/month. Development opportunities for convenience retail and decentralised office park projects exist. Industrial opportunities exist in the form of modern warehousing developments.