Real Estate Investor Magazine South Africa May/June 2015 | Page 55

REI OFFSHORE

AFRICA HAS HIGH
GROWTH POTENTIAL

EXPERT Q&A
WEST AFRICAN
DEVELOPMENTS

T

he Knight Frank Wealth Report Attitudes Survey indicates that the growth
potential in wealth in Africa was 89% last year, while the predicted outlook for
this year is at 82%. Africa is third on the list of continents, with North America
first and Latin America at 85%.
Out of the top 40 cities where Ultra High Net Worth Individual (UNHWIs) invest,
Johannesburg is listed as 28th and Cape Town 36th. This survey takes into account
what that city has to offer and why it is in high demand.
The Prime International Residential Index lists Cape Town as 8th in the world
rankings (with a 13.2% annual growth) and Johannesburg in 19th position, (with
8,7% annual change). These are the only two cities in Africa to feature in the top 100.
London is comparatively listed in 32nd position with 5,1% growth and Buenos Aires as
99th with a -15% change.
In comparing property prices, the survey shows that $1 million will get you
17m2 in Monaco and 204m2 in Cape Town, which does make this area attractive to
foreigners.
UHNWIs are allocating funds to offshore property investments. Peripheral markets
such as Ireland and Spain are benefiting from this trend.
“A property investor knows that if the lean years are to continue, one buys the
safe prime assets, like offices in Manhattan or shops on the Champs-Élysées. If the
economy is about to improve, the riskier but higher-yielding properties are where
opportunities lie,” says James Roberts, Chief Economist at Knight Frank.

Dale Ramsden
Founder and Managing Partner
RMB Westport

Mark Bradford
Chairman
JLL Sub-Saharan Africa
Q How do you see the West African
story developing in the next few
years?

West Africa is rich in both natural resources
and population. I ts future success will
be dependent upon the speed with which
it is able to conver t its economic base to
manufac turing and ser vices. The prevailing
fall in global commodity prices may force
governments and business to focus on this
conversion. What is needed is for governments
to invest in infrastructure, regulatory
transparency and to assist investors by
increasing the ‘ease of doing business’
in the region.
Q Are Nigeria’s Eko Atlantic City and
Angola’s Baia de Luanda taking
shape?

Developing infrastructure is a core factor in sustaining
growth on the African continent. Sub-Saharan
Africa needs these infrastructure developments
to be truly globally competitive. The ‘supply and
demand mismatch’ in West African countries such as
Ghana, Nigeria and Angola creates opportunities for
developing infrastructure.

Unlike so many of Africa’s planned
developments, Eko Atlantic is well underway.
Land has been reclaimed from the sea and
construction has commenced. Eko Atlantic
promises a live, work and play environment
on the edge of Victoria Island, a vision which
in principal will be welcomed by many
corporates and residents of the city. The
promenade of Baia de Luanda has provided
momentum for the re-development of property
within its proximity. It will provide office and
residential accommodation in two nodes, both
of which are integrated with this vibrant city.

Kganya Kgare
Economist: Emerging Markets
Stanlib

Q What is driving Nairobi’s
momentum?

There are many divergences within the African
continent and consistent standards will go a long
way to addressing challenges. Inflation in East Africa
is well within target and the Kenyan Shilling is very
stable, with 6% growth expected in 2015, inflation in
Nigeria is expected to accelerate from the middle of
the year and interest rates are at an all-time high.
www.reimag.co.za

Nairobi is regarded as the corporate gateway
to East Africa. This established city has
scale and offers modern office, retail and
residential accomm