The Luxury Real Estate Market in West Africa (1/2)
- March 18, 2014
- Posted by: Fatou NDIAYE
- Category: Travel, Logistics & Hospitality, West Africa
West African countries represent a population of 245 million of inhabitants. With a yearly average income of $309 for each person, the region‘s economic growth has yearly reached 2.5%. The International Monetary Fund (IMF) expects that globally sub-Saharan Africa’s growth will continue with an annual GDP growth forecast of 5-6% over the next five years.
These optimistic forecasts combined with the will of West African countries to achieve development goals, stimulate the economic activities. In this context, the infrastructure plays a major role as it is a determining factor to attract foreign investors and increase the region’s visibility on the international scale. It is in this perspective that we choose to analyze the West African market of luxury real estate as a key for enhancing the business environment and economic situation in West Africa. The face of West African countries is changing by giving way to more luxurious properties, skyscrapers, modern malls and high standing offices.
These infrastructure developments boost the establishment of international brands and companies which are interested in the West African market. It’s also a sign of the increase of the living standard for a certain category of the population. This sector which is rapidly expanding is led by some local property developers as well as foreign investors. The recent key projects are located in countries like Nigeria, Ghana, Senegal and Côte d’Ivoire.
For this 1st round, let us focus on Nigeria and Ghana. We are going to deal with Senegal and Côte d’Ivoire in a next post.
Nigeria: Eko Atlantic, the flagship of the real estate market
Nigeria was consolidating important real estate projects these last years which is coherent with its development’s potential and political agenda. Below are some key projects in Nigeria.
Eko Atlantic is a huge urban project in Lagos which is estimated to house around 250.000 people at Victoria Island. In terms of infrastructure, there will be residential, commercial, financial and touristic accommodations with tree-lined boulevards, waterways, manicured gardens, elegant plazas, three marinas and a stunning ocean front promenade.
A business district will be created to boost trade in Nigeria as Eko Atlantic is expected to be the new financial epicenter of West Africa by 2020 contributing to confirm Nigeria’s authority as a financial hub for the whole West Africa.
The project involves many stakeholders whose know-how for this kind of development is internationally admitted (China Communication Construction Group, South Energyx Nigeria Limited, a subsidiary of Chagoury Group which is dedicated to the development of the project, many investors: First bank, FCMB, Access Bank Plc., GT Bank in Nigeria, BNP Paribas Fortis and KBC Bank.
The Ocean Parade which consists of 14 towers on Banana Island with different facilities is set to provide an upscale life style to its inhabitants.
Ghana: Good perspectives but some remaining problems
Beside Nigeria, Ghanaian luxury real estate market is also prospering.
With the lack of housing (deficit of approximately 80,000 housing units per year) in the country and its attractiveness for investors, the luxury real estate market benefits from this situation. This offers players in the infrastructure sector an opportunity to develop more projects so that they bridge the current deficit and meet the future demand in terms of residential and commercial real estate.
This trend is demonstrated by the projects in terms of commercial real estate investments as the recent ones are: Makola Shopping Mall, Agbogloshie Market, and Accra Mall for the retail industry.
One of the huge projects for the luxurious residential market is Palmer’s Place developed by Devtraco in partnership with a Ghanaian Property developer.
The Ghanaian real estate market is also facing some challenges such as: difficulties related to the acquisition of lands and the lack of synergy between the property market and the financial sector.
Fatou NDIAYE, Researcher, Infomineo.
 World Bank – West Africa : Facts and Figures
 International Monetary Fund – World Economic Outlook Database October 2013
 Ghanaian Ministry of Water Resources, Works and Housing