F IN A NCE A ND IN V ES T MEN T
GRADE A OFFICE SPACE, GHANA: Absa Commercial Property Finance was involved in financing PwC Tower in Accra, Ghana. The 10-floor development boasts highend interior finishes, modern architectural design, and state-of-the-art systems and technology. Anchor tenant PwC will occupy six floors, while the remaining space is a multi-let to diverse businesses.
Opportunities in
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ith a footprint in sub-Saharan Africa, including South Africa, Botswana, Namibia, Ghana, Kenya, Mozambique, Tanzania, Uganda, Zambia, Mauritius and the Seychelles, the challenge for the Absa Group is understanding local operations. “We have a unique advantage,” says Somaya Joshua, head of Africa regional operations at Absa CPF. “With a banking presence in the countries where we actively provide debt, we have an on-the-ground understanding of those markets.” COVID-19 has impacted new development activity, which is limited. On the other hand, new Somaya Joshua development “varies from country to country”. Generally, “Clients have revised new investment decisions down given the uncertain environment,” reflects Joshua.
affordable housing and warehousing Predictably, with burgeoning population growth, there is pent-up demand for affordable housing. “In many markets, underdeveloped housing finance
Sub-Saharan Africa remains a worthwhile investment proposition. By SAMANTHA BARNES
systems provide both a challenge and an opportunity for developers and financiers,” says Joshua. “Demand for affordable housing extends to student housing.” Absa CPF anticipates that logistics and warehousing will present opportunities, given the drive to expand distribution warehousing in African corridors. “This may create opportunities for developers,” observes Joshua. Business Partners Limited expects increased demand for warehousing. Shane Padayachee, area manager at Business Partners Limited, one of Africa’s leading financiers for formal small and medium owner-managed businesses, explains: “Warehousing and storage seems to
have done well, especially in well situated areas.” Padayachee suggests a demand for small and medium industrial units in the short term: “As businesses improve efficiencies in staffing and operations, they could downsize space required.” He cautions that some larger warehouse spaces may find things more difficult until the market improves.
Taking a longer view on commercial space The outlook for commercial space is worrying, given lost revenue and rising unemployment. Commercial turnovers remain constrained. Liquidity is a problem. “They will stabilise,” Padayachee predicts. “Markets always recover and the commercial property industry will be no exception, making it a worthwhile investment in the long-term as the economy recovers.” While economic recovery is unlikely in coming months, Padayachee expects that over the coming years, property returns should, subject to interest rates, improve to at least pre-lockdown levels, albeit off the current low valuation base. “The need for commercial space will escalate for businesses across various sectors, ensuring improved returns as the economy recovers,” says Padayachee. Working from home has increased demand for datacentred rental space. Business Partners confirms significant commercial developments in sub-Saharan Africa. Ukam Properties spearheaded a 1 200m2 retail development in Kigali City. Studio 45 invested in a six-floor, mixeduse, office and residential development in Kamwokya, Kampala. Progress.
IS OFFSHORE PROPERTY INVESTMENT AN ASSET CLASS? When investing in offshore property, global real estate investment should definitely be recognised as a distinct asset class on the same level as other asset classes. It is a diversifying, value-adding, safe and appreciating addition to one’s portfolio. In fact, with all the many prevailing local and global uncertainties, diversifying into international property in stable and secure jurisdictions can serve as an excellent hedge against risks, says Craig Featherby, CEO and Founder of Carrick. “It is for this very reason that Carrick, together with our international partners, is now assisting its clients who wish to diversify into offshore property with a comprehensive range of services,” says Featherby.
Craig Featherby
COMMERCIAL PROPERTY
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