AFRICAN INVESTMENT
How Do You Grow
Successfully In Africa
W
hile there is no magic recipe to manage
the often-complex real estate requirements of corporate growth in Africa, a
number of companies are applying some key operating principles, which are likely to increase your
chances of success, when entering or growing your
real estate footprint in Africa.
Africa is not one country
It may sound obvious but a continent of 54 countries
and with 56 cities of over a million people, Africa
offers an enormous diversity of operating conditions,
city dynamics and real estate environments.
The incredible diversity of the African continent
means that a deep understanding of the local nuances
of individual markets is an important pre-requisite
to success. As well as differences in language and
culture, differences in the business and real estate
operating environment abound. Divergences in legal
and contractual norms can create challenges for
companies looking to lease, buy or operate real estate.
Tools such as JLL’s Real Estate Transparency
Index, City Commercial Attraction Index and
the Real Estate Standards Index can assist with
due diligence and planning, but access to a robust
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Offshore Handbook 2016
network of best in class, on the ground partners that
operate to the same standards and with the same
ethics as your business are crucial.
Legal, regulatory and market norms will often
have a specific and tangible impact on real estate
strategy and options – those companies that conduct
appropriate due diligence, and adopt flexible
strategies which account for the diversity of market
norms are more likely to succeed.
Take a hub and spoke approach
Many international companies are increasingly
using a hub and spoke approach to growth in Africa,
selecting a small number of key investment locations,
in key geographies and building a hub presence.
Smaller spoke locations can increase coverage with
lower investment costs, and be expanded, contracted
or absorbed back into hub locations with relative ease.
With continuing volatility in a number of African
markets, this approach helps companies manage
risk, achieve real estate portfolio efficiency and
reduce investment costs, providing a robust base
to expand and build a wider network as and when
spoke locations are considered mature enough for
additional investment.
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