Sub-Saharan infrastructure development expert Dr Tinashe Manzungu has urged African countries to invest in their infrastructure development in order to unlock real estate market globally.
Speaking during a Public Annual Lecture-commemorating the 2023 African Achievers Awards at the European School of Economics in London last week, Manzungu who is also a Board Director of African Business Council as well as COMESA said Africa is emerging as a potential hotspot for real estate investment due to its rapid urbanisation, as such the continent should escalate its projects towards establishing the global real estate market.
Manzungu was a guest speaker at the lecture which was a side line event of the 13th African Achievers Awards where he also scooped the Excellence in Leadership and Global Corporate Enterprise in Africa Award.
“Africa is emerging as a potential hotspot for real estate investment due to its rapid urbanization, rising middle-class population, increased foreign direct investment, and improving business environment. Statistics show promising opportunities and strategies that can accelerate Africa’s growth in the real estate sector,” said Manzungu.
“Investing in infrastructure is crucial for unlocking the potential of Africa’s real estate market. Developing quality transportation networks, power supply, and other essential amenities will attract more investors and drive economic growth.”
He said the continent should also encourage partnerships between the public and private sectors in real estate development whereas governments provide policies, land and infrastructure support, while private investors bring capital and expertise.
As many countries in Africa are experiencing massive urban migration where people are moving from the rural area to the urban areas in pursuit of greener pastures, Manzungu also noted that it is essential for African countries’ governments to establish affordable housing initiatives.
He said, “Africa is experiencing significant urbanization, with its urban population expected to double by 2050. This urban growth creates a demand for housing, commercial spaces, and infrastructure, making it an attractive investment opportunity for real estate developers.”
“Promoting affordable housing projects can address the housing deficit in African cities and provide opportunities for real estate developers. Governments, with the support of the private sector, should provide incentives and remove regulatory hurdles to encourage affordable housing development.”
The immediate past Zimbabwe National Chamber of Commerce (ZNCC) president emphasised on the essence of technology adoption in the real estate development urging the continent to use the necessary technology to ensure transparency that lures global investors. He said Africa should adopt to technology solutions such as digital platforms, smart cities and proptech (property technology) to enhance efficiency and transparency in the real estate sector. “Technology can streamline property transactions, facilitate property management, and attract tech-savvy investors,” he added.
On the other hand, Manzungu encouraged the European countries to invest in the real estate sector in Africa now more than ever as the continent is currently experiencing a rising middle-class population. According to Manzungu the expansion of the Africa’s middle class is bringing about increased disposable incomes and a desire for improved living standards as well as driving demand for quality housing, retail spaces and leisure facilities.
“Africa’s middle class is projected to reach 1.1 billion people by 2060, representing a significant consumer base for real estate developers. The retail sector in Africa is expected to grow at a CAGR of 7.3% between 2021 and 2026, driven by the rising middle-class population,” he added.
“Africa has been attracting increasing Foreign Direct Investment (FDI) in recent years, including in the real estate sector. International investors are recognizing the untapped potential and attractive returns offered by African real estate markets.”
Manzungu said the FDI flows into Africa’s real estate sector increased by 14 % in 2019 reaching an estimated US$3.3 billion. He added that South Africa, Nigeria and Kenya have been the top destinations for real estate FDI in Africa.
