Image credit: 123rf.com

Africa’s growing middle class, and the continuous expansion of its consumer segments in recent years has led to an increase in demand for logistics property. Over the past few years most retailers and manufacturers have made efforts to expand their operations to fit the growing demand although a supply gap still remains. More than the available facilities, occupiers are now looking for high technical specifications that support modern retailing, distribution and manufacturing practices.

The Logistics Africa Report by Knight Frank explains that, recent activity by developers and investors have largely focused on retail and office space leaving behind logistics property. However, there has been some progress since some players like Actis and RMB Westport have taken initiative to boost logistics projects in Sub-Saharan Africa. As with most other commercial property, South Africa hosts some of the largest and most sophisticated logistics property in Sub-Saharan Africa. With that wealth of experience, South African developers are currently seeking to diffuse their expertise into the rest of the continent.

Traffic congestion within most African large cities have impacted logistical operations leading to many logistical property developers to consider locating their facilities outside the busy city centres. Additionally, inland dry ports have become a very viable option as a result of sea port congestion and competition for limited warehouse space around those areas.

Major logistics market drivers between 2015 and 2016 include the growing middle class and consumer spending, mineral and resource demand, new oil and gas discoveries, rapid infrastructure development, stronger agricultural demand and increased FDI. Furthermore, the growth of online retail markets has the potential to exert major changes in the demand and supply of logistics property in Africa. The e-commerce market in Africa is already projected to reach US$50 billion by 2018 with pioneers such as Jumia and Konga in Nigeria, Zonda and Rupu in South Africa and Kenya respectively already putting up such facilities.

With the rising e-commerce trends, it is foreseeable that e-commerce companies will grow to demand the kind of sophisticated logistics properties in use by more advance companies like Amazon in the U.S. Presently one of the most promising logistical hotspots in Sub-Saharan Africa is Lusaka, Zambia which has been framed for its strategic geographic location at the heart of Southern, Eastern and Central Africa.

Five of the cities with the highest prime logistical rents in Sub-Saharan Africa include Luanda, Abuja, Accra, Maputo and Lagos. As reported by the Logistics Performance Index 2016 (LPI), which rates the logistic friendliness of countries, the top 5 in Africa include South Africa with a score of 3.78, Kenya (3.33), Botswana (3.05), Uganda (3.04) and Tanzania (2.99). The same index ranks South Africa at position 20 out of 160 globally, Kenya at 42nd and Botswana at 57th. For developers, the opportunities are ripe and present as the challenges are.

Featured Properties

Pristine 4-Bedroom Townhouse in Runda
Asking Price KSh 38,000,000
Beds:   4 Baths:   4
5-Bedroom house for sale/rent in Lavington
Asking Price KSh 68,000,000
Beds:   5 Baths:   5
List of Land Available for Sale
Asking Price KSh 21,000,000