The next wave of property development in Africa is coming

Posted On Wednesday, 31 July 2019 12:01 Published by
Rate this item
(0 votes)

The past decade has seen South African property developers and investors forge their way up the African continent and then pull back.

 -NIYI-ADELEYE-

As they withdraw, a new wave of property progress is building – a more sustainable one - without them.

The Africa Property Investment (API) Summit has tracked developments on the African property landscape for the last decade. As the continent’s real estate market has evolved, the API Summit has seen business models change significantly, adapting to the challenges and opportunities in Africa.

-HENNING-RASMUS-

Most recently, the API Summit has witnessed development on the continent slow, leading to a better balance of demand and supply. And, with market fundamentals remaining in place, Standard Bank’s Head of Estate Finance, African Regions Niyi Adeleye, who is among the impressive line-up of speakers at the next API Summit in South Africa this October, says that growth is inevitable.

“The precise timing is hard to predict but the next wave of African property development and investment will be less short-term and opportunistic. There’ll be a more sustainable approach that creates products that really serve their markets and make sense in their context,” he says. “As some investors pull out, property aggregators can acquire portfolios at competitive prices. Investment levels are currently in a holding pattern, but there’s more longer-term capital entering the market.”

This marks a massive change from the first wave of South African developers and funds, which mostly replicated South African models: from designs to financing and the income model via ‘known’ tenants. “The aim was to make money in stable currencies by exporting our version of business as usual,” explains API Summit speaker and Paragon Architects Director, Henning Rasmuss.

-KEEVIN-TEEROOVENGADUM-

“This worked in a few countries, for a while. But it became clear that this is just one way of doing business. Quickly, fully blended development models have emerged. Smaller projects have been broadly more successful, and ambitions and expectations have been scaled down,” says Rasmuss.

Independent real estate advisor Kevin Teeroovengadum, who will also take the podium at the API Summit, agrees that the copy-and-paste model has had limited success. “It is imperative to take time to understand the depth of markets and how local nuances impact on what needs to be built.”

Today, the API Summit sees the African property game changing and new players coming to market, catering to mass needs and solving critical shortages in housing, logistics, healthcare and student accommodation. New projects are rising in the retail and industrial sectors, as well as data centres, business hotels and private education facilities, many of which will be at the API Summit.

“We are seeing more funds and developers forming joint ventures and using the experience of local developers to deliver better and more sustainable projects,” says Kfir Rusin, MD for API Events, host of the API Summit, the major industry event on African real estate for South Africa and globally.

The 10th consecutive API Summit takes place on October 2 and 3, 2019 at the Sandton Convention Centre in Sandton Central and is themed Africa RE-Inspired.

Last modified on Wednesday, 31 July 2019 17:46

Most Popular

53 Telkom properties coming up for auction

Mar 02, 2020
Orange Grove
GoIndustry DoveBid SA (GoIndustry) is hosting another massive property auction on behalf…

Balwin's Munyaka registers record R850 million in opening weekend sales, selling 555 apartments

Mar 09, 2020
Steve_Brookes_Balwin_Properties
JSE listed Balwin Properties, a developer that cares about environmentally responsible…

Young buyers driving residential property market in Bloemfontein

Mar 04, 2020
Bloem Willows
Bloemfontein is experiencing a surge in residential property transactions concluded by…

Hyprop bolsters Rosebank Mall offering through securing the Checkers Premium FreshX concept

Mar 04, 2020
Rosebank Mall
Shoppers at Rosebank Mall in Johannesburg can look forward to a world-class supermarket…

Fairvest Property Holdings maintains above-inflation growth in challenging market

Mar 02, 2020
Darren Wilder CEO Fairvest Property Holdings
Fairvest Property Holdings Limited (“Fairvest”) today again announced solid results for…

Please publish modules in offcanvas position.