Investors keen to clinch EAC property deals

By Victor MUJIDU

East Africa’s real estate sector will continue to witness an increase in capital investment chiefly from international real estate funds and institutional players.

Stanbic Bank’s Head of African Real Estate, Niyi Adeleye noted that the interest in the region has been fueled by a dynamic macro-economic environment that has created opportunities for investors keen to tap into opportunities in the regional property market.

“Since the emergence from COVID-19 headwinds, the real estate sector has been characterized by a higher interest rate environment that justifies value acquisitions for funds with liquidity and sound asset management capabilities able to manage these assets at more optimal levels,” said Adeleye.

He made those remarks ahead of the upcoming 10th annual East Africa Private Investment Summit set to take place on 17-18 May 2023 in Nairobi.

Pricing Opportunities

Additionally, the resilience and performance of the Light Industrial and Warehousing sector in the region provide a new frontier for investors to acquire new assets and increase returns in the short term.

“While it is still in its infancy, A-grade industrial real estate in the region has shown outstanding performance potential to be able to weather any downturns expected,” said Donald Borthwick of London-listed Grit Real Estate Income Group.

The region’s maturing sub-segments are also supporting allocations and strategy. These include retail, student housing, and industrial which appear to exhibit a higher level of maturity than other regions in the continent except South Africa.

“Nairobi’s position as the hub of East Africa has also enhanced occupier demand. So far, Kenya has seen a 9 percent increase quarter on quarter in the number of registered businesses in Q1 2023 resulting in 37,176 registrations in Q1 2023.

Key occupiers in the financial services and tech sectors are continuing to drive demand in the commercial sector pointing to cautious optimism on the traditional real estate sectors as well,” Tilda Mwai, Research Associate at Estate Intel noted.

Property analysts remain cautiously optimistic about middle-income residential, student housing, corporate accommodation, and data centers, as well as performing retail and office sectors.

Many buyers are looking for more affordable housing options as the cost of living rises. East Africa is a rapidly developing region of the African continent, with a growing population and a rising middle class.

As a result, the housing market in East Africa is changing rapidly, with new trends emerging that are reshaping the way people live and work in the region.

One of the key trends in the East African housing market is the increasing demand for affordable housing.

With a large portion of the population still living in informal settlements or slums, there is a growing need for affordable housing options that can provide safe and secure living conditions for all.

Governments and private developers are responding to this demand by investing in new affordable housing projects, often in the form of high-density apartment complexes.

Another trend in the East African housing market is the growth of the middle class, which is driving demand for more upmarket housing options.

This is particularly true in urban areas, where the middle class is concentrated and where there is a growing demand for high-quality amenities and modern living spaces.

Developers are responding to this demand by building more luxury apartments and gated communities, often with features like swimming pools, gyms, and 24-hour security.

At the same time, there is also a growing trend toward sustainable and eco-friendly housing in East Africa. With concerns about climate change and environmental degradation on the rise, many developers and homeowners are looking for ways to reduce their carbon footprint and promote sustainability.

This has led to an increase in the use of renewable energy sources like solar power, as well as the incorporation of green building techniques and materials like recycled wood and bamboo.