africa gri 2015 interviews with real estate experts

INTERVIEW WITH AFRICAN REAL ESTATE LEADERS:Featuring...

VICTOR SODALACEOPYLOSZambia

W. BRITT GWINNERHead of Housing Finance, Financial Institutions GroupIFC SUB-SAHARANAFRICA Kenya

SAUL GUMEDE CEODIJALO PROPERTY GROUP South Africa

ANKUSH SHAHManaging DirectorSUMARIA GROUPTanzania

JAMES HODDELLCEOMENTOR MANAGEMENT LTD Kenya

KEVIN TEEROOVENGADUM CEOATTAFRICA Mauritius

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1. Which African country will provide the best opportunity for investors in 2015, and why?

K.T.: Mozambique. Post elections of this year, the country is set on a path of renewed political stability and investments in real estate will flow for developments of retail and commercial assets on the back of gas/coal explorations. We are seeing major investments in Real Estate in Maputo, Pemba, Beira.

S.G.: Although the focus remains strongly on Ghana, Nigeria and Kenya, there is growing interest for Mozambique (driven by gas exploration, and Zambia (mining). Investors are also starting to consider opportunities in Rwanda, although it remains a small market. The retailing opportunities across the continent remain considerable and retailers are taking a strong look at secondary mining towns.

W.B.G.: Kenya. Despite recent political tensions and security issues, Kenya’s economy shows strong fundamental growth, which will enable it to weather the headwinds it faces. Other factors in Kenya’s favour: substantial pent-up demand for affordable housing and for high quality commercial spaces, a rising middle class, and increased interest from professional developers and investors, both domestic and international.

J.H.: Kenya – A stable economy which is not dependent on natural resources and has strengthening capital markets and a robust banking system.

A.S.: Tanzania. USD based rentals and transactions, higher yields than many neighbouring countries, and a fast growing population, with two of the fastest growing cities in Africa - Dar es Salaam and Mwanza. With a history of political stability, the economy is quite broadly based and the capital markets are opening up; so even without O&G tailwinds, the economy and populations are set to grow rapidly and there is an overwhelming undersupply of residential and retail stock.

V.S.: Kenya - increased stability and new political will and business enviroment and Mozambique - been neglected for a while

2. Which new or upcoming real estate project do you see as the most interesting in Sub-Saharan Africa?

K.T.: Once more the Waterfalls development in Johannesburg in South Africa.

S.G.: There are a number of large development projects

across the continent which have the potential to alter the structure of entire towns. These for example include Tatu Village in Kenya and Eko Atalantic In Lagos. There are also a few significant developments in South Africa such as the mixed use Waterfall City development and the Modderfontein City development.

W.B.G.: Garden City in Nairobi to open shopping mall May, 2015. Promises to set the bar at a new height for the consumer shopping experience in East Africa, and provide important knock-on development impact to surrounding neighbourhoods. On the green side, will include Africa’s largest solar panel covered car park canopy, to generate 1,246,000 kWh per year, reducing Garden City’s CO2 emissions by an estimated 492 tonnes per year.

J.H.: Garden City, Nairobi – Is a true mixed use environment with retail, residential and offices all together set around a parkland environment. This raises the bar for African development.

A.S.: Dar es Salaam Kigamboni / South beach area. Dar es Salaam is a geographically constrained city with a population growing at 6% per year. You can’t build east (into the Indian Ocean!), and north and west there has been extensive growth and correspondingly high pricing and traffic problems. The southern part of Dar es Salaam

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is cut off by a body of water and has historically only been accessible by ferry (60-90 min wait each way for a 5 min journey) or by driving c. 90 mins around the water. A 6-lane toll bridge is currently under construction to link this area directly to the port and the city centre. So we are looking at a number of residential and industrial projects in the area and in Dar es Salaam generally.

V.S.: Garden City - Kenya and Mall of Africa - South Africa

3. Which sub-sector[s] are you most bullish about in 2015, and why?

K.T.: Retail given the fact that retailers are expanding and looking for space from developers.

S.G.: The growth of the African middle class is expected to continue providing opportunities across the continent. The continent remains undershopped. A growing middle class is also expected to continue to underpin the demand for housing. This also offers mixed use and mixed income development opportunities.

W.B.G.: Residential. Today, roughly 100,000 households in Nairobis’ informal settlements pay rent equal to the mortgage on a USDeq 35,000 house. By 2030, 40 million

SSA households will be able to afford a house priced from USD 27,000 to 135,000. Right now, these households are not well served. Most formally built housing units in markets like Luanda, Lagos, or Nairobi are priced at USDeq 150,000 and above, unaffordable to the vast majority of the population. Developers and banks are missing an important opportunity to move to a large-scale, low cost business model.

J.H.: Local retail centres in suburbs and provincial cities – due to expansion of middle income spenders out of the capital cities.

A.S.: Residential and retail. Many of the East African markets are looking oversupplied for office / commercial stock, especially taking into account upcoming projects. In our markets, retailers are still struggling to find the right spaces and there is a lot of pent up demand for properly titled residential plots or units.

V.S.: Retail - increased focus by regional and global retailers, Residential sector

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JOHANNESBURG 21-22 APRILH y a t t R e g e n c y J o h a n n e s b u r g , R o s e b a n k

AFRICAGRI2015The 3rd Annual

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