African property markets are as diverse as can be, based on various political, economic and cultural factors. But this has not stopped certain trends from sweeping across the continent and influencing change. According to Nedbank Head of Property Finance, Gerhard Zeelie, the following are the main forces driving change;
E-commerce changing retail
The spread of the internet, increasing digital literacy and the ubiquity of social media have created a sufficient basis and incentive for e-commerce enterprises to thrive. Traditional retail that have not adopted current technological tools have particularly been affected and more so going forward.
The shift to e-commerce by large retailers as well as small and medium-sized shops has changed the way central locations are perceived, creating a higher demand for decentralized retail property to reach the last mile.
In some cases, the efficiency of online marketing and e-commerce has led some retailers particularly small businesses, to close physical locations in a bid to save costs. As a result, landlords have had to deal with reduced rental income. According to Xinhua, e-commerce has been disrupting the small-scale rental business in Kenya leading some landlords to offer one-month free rent.
African cities have some of the highest urbanization rates in the world as millions of people pour into urban centres annually for search of jobs and opportunities. This has translated to demand in every sector of the economy including property. However, the opportunity for residential property is not an open and shut case due to factors such as affordability, financing and, specific supply and demand.
“Given the expansion of businesses in the city centres of countries experiencing strong growth, opportunities will almost certainly increase for investment in high-density residential and multi-purpose structures close to commercial and transport zones,” says Zeelie.
As economies develop, there is a natural and necessary movement towards the demand for better goods and services. A number of African nations have been seeing remarkable economic growth and are expected to continue in the same trajectory at least in the short term. This economic growth is expected to drive expansion in the property industry.
Read; A Decade in Real Estate