Clearly the selection of hub location will differ depending on the industry and risk profile of the corporation, but the principle can be adapted across sectors and locations and is used by a number of leading African and international companies to drive operational efficiency and mitigate risk.
Use the right partners Companies can and do take a range of different approaches to partnering in Africa. For those seeking to enter or expand in the region, there are no shortage of options available at any phase from market selection and strategy inception to operalisation and tactical execution on the ground.
While the market norms may differ, much of the same logic used when selecting partners or vendors elsewhere in the world can be applied to partner or vendor selection and management in Africa. Selecting the right partners based on expertise, service levels and ethics is of course the first prerequisite, however minimising the number of partners on the ground is also important in ensuring consistency and equivalence in operational standards and delivery.
Using an outsourcing approach to real estate partner selection and tactical delivery is increasing amongst international corporations both in Africa and more broadly, as they seek to derisk, achieve economies of scale and benefit from consistent and standardised service levels in multiple markets and locations.
Use integrated real estate solutions While the real estate and facilities solutions will vary widely depending on the specific corporate requirements, a growing number of integrated or self-sufficient solutions are being seen in African real estate markets.
Serviced offices is one segment of the market that can appeal to those seeking to establish a smaller foothold in key hubs, with the advantage that issues including IT connectivity, energy and facilities management and security are integrated, potentially allowing greater speed to market. Such speed to market will of course come at a premium, however it is a cost a range of companies are prepared to accept for the establishment of smaller facilities.
A number of more sophisticated developers are also exploring more integrated real estate solutions which incorporate aspects such as access to power and facilities management.
A full understanding of who you are dealing with, particularly in the developer and landlord space is a
www. reimag. co. za further factor which can bring significant benefits. It can be preferable for multinationals to seek landlords where non- performance has recourse outside of the operational country. Should issues around performance emerge this can make resolution quicker and more efficient.
Legal, regulatory and market norms in Africa will often have a specific and tangible impact on real estate strategy and options
Embedded risk mitigation The most successful corporate growth strategies in Africa usually take a holistic and longterm approach and consider an extensive list of operational considerations across the full lifecycle of the business. Appropriate real estate and facilities are a small if important part of a wider jigsaw encompassing strategies around market selection and entry, talent attraction and retention, business continuity, infrastructure, and a host of other trading, due diligence and legal considerations.
Embedding risk mitigation at every stage is one of the most important keys to success. Projects are likely to take longer, cost more and require greater flexibility.
Selecting the right partners can help mitigate many of the operational and real estate risks which occur throughout the process of corporate growth, but robust internal risk mitigation processes and due diligence are also essential and should be fully embedded in decision-making.
There is no doubt that the future is bright for the African continent, even if many markets and sectors are still in the early stages of their evolution. While a host of operational obstacles will continue to challenge international corporations as they seek to grow in Africa, robust due diligence on the ground and in person, remains perhaps the most important way to ensure optimal real estate and operational outcomes. Those companies able to focus on the long term and manage their risk and investment accordingly are most likely to reap the greatest rewards.
RESOURCES
Carroll, T, Williamson, K, McAuley, M.‘ Corporate Entry Into Africa: A New Chapter’,
Jones Lang LaSalle( JLL)
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