Close Menu
  • Briefing
    • Cover Story
    • Latest News
    • Counties
  • Politics
    • Society
  • Special Reports
    • Companies
    • Enterprise
    • Money
    • Technology
  • Columns
  • Dispatches from China
  • Member Content
    • Shop
  • Contact Us
    • About us
Facebook X (Twitter) Instagram
Facebook X (Twitter) Instagram LinkedIn
Nairobi Business Monthly
Subscribe
  • Briefing
    • Cover Story
    • Latest News
    • Counties
  • Politics
    • Society
  • Special Reports
    • Companies
    • Enterprise
    • Money
    • Technology
  • Columns
  • Dispatches from China
  • Member Content
    • Shop
  • Contact Us
    • About us
Nairobi Business Monthly
Home»Property»Domestic capital anchors property investment across Africa
Property

Domestic capital anchors property investment across Africa

NBM CORRESPONDENTBy NBM CORRESPONDENT8th May 2019Updated:23rd September 2019No Comments3 Mins Read
Facebook Twitter WhatsApp Telegram Email
Share
Facebook Twitter WhatsApp Telegram Email

Office yields remained largely stable in most African markets over the past two years, anchored by patient domestic capital as local investors assume a longer-term perspective, a new analysis by Knight Frank shows.

The analysis, published in a new Knight Frank report, Africa Horizons, shows that of the 35 office markets covered, yield remained stable in 16 locations in the two years to 2018 and rose in six, while 13 markets recorded declines. Africa Horizons provides a unique guide to real estate investment opportunities on the continent, examining developments in agriculture, hospitality, healthcare, occupier services (office), capital markets, residential and logistics property sectors.

“By taking a longer-term perspective, and in some cases a lower return profile, local investors have remained more active than headline figures suggest. This explains how yields in most major markets have remained stable in the face of weaker reported transactions,” the report states.

The Nairobi Law Monthly September Edition

Just under $2 billion worth of deals in Africa were publicised in 2018, predominantly involving assets in South Africa. Contrary to the global trend, Africa’s recorded transaction activity peaked in 2016, and has since eased. Notably, private capital remains an important driver of investment activity in much of Africa, although ultimately somewhat opaque.

According to the report, healthy economic prospects suggest that Africa will remain a compelling investment destination for those targeting key centres. In addition to the office markets in these locations, the report notes, rising wealth will favour sectors exposed to consumer logistics, and selectively, retail.

“We envisage rising investor demand for those African locations that can demonstrate something of a counter-cyclical nature, combined with rising domestic wealth,” the Africa Horizons report concludes.

In 2018, Africa recorded more than 700 separate inward investment projects, half of which originated from corporations domiciled in the US, UK, France, China and Germany. The investment destinations were broad although South Africa, Morocco, Kenya, Nigeria and Ethiopia accounted for over half of the projects, according to the report.

In Nairobi, yields in 2018 stood at 8% for office, 8.5% for logistics property, and 9% for retail. A-grade warehousing around the capital currently commands monthly rents in the upward of $6 per square metre, almost double that of the predominant stock of older units that lack modern features such as cross-docking and intermodal facilities.

“Yields in each of the market segments align to their risk profiles, with retail being much riskier in Nairobi currently hence the proportionately higher yield,” said Ben Woodhams, Knight Frank Kenya Managing Director.

According to the Africa Horizons report, top residential investment opportunities across the continent include student accommodation (with Zambia, South Africa and Kenya being education hotspots), retirement homes, and middle-income housing as demographics change. In Kenya’s logistics sector, formal retailers have emerged as a major driver of growth owing to their increasing need for large centralised warehouses as they gain critical mass countrywide.     

The Nairobi Law Monthly September Edition
Follow on Facebook Follow on X (Twitter) Follow on WhatsApp
Share. Facebook Twitter WhatsApp Telegram
NBM CORRESPONDENT

Related Posts

Rosslyn Riviera Mall unveils ‘curated experiences’ for revelers

29th August 2024

Well executed, affordable housing projects can be the next big thing

6th July 2024

Finsco Africa, Legacy Ridges win as court throws out property case

12th June 2024

Want to invest in a holiday home? Here are some factors to consider

11th June 2024
Add A Comment

Leave A Reply Cancel Reply

The Nairobi Law Monthly September Edition
Latest Posts

Equity Group secures shareholder nod for UAE office and Sh16 billion dividend payout

30th June 2025

Court orders Stanbic Bank to pay Sh25m over 1-day bond error in KPA tender

30th June 2025

KEBS eases import rules for specialized vehicles

30th June 2025

Kenyan startups join Google’s AI accelerator amid Gen Z social commerce boom

30th June 2025

Social media takes over as top shopping hub for Gen Z in Kenya

30th June 2025
The Nairobi Law Monthly September Edition
Nairobi Business Monthly
Facebook X (Twitter) Instagram LinkedIn
  • About Us
  • Member Content
  • Download Magazine
  • Contact Us
  • Privacy policy
© 2025 NairobiBusinessMonthly. Designed by Okii

Type above and press Enter to search. Press Esc to cancel.