Mention “Africa” to the world’s industrialists, retailers, bankers and technologists, and the associated responses are “exploration” and “opportunity”. Mention “opportunity” to Africans and the response will reflect ambitions to develop sophisticated economies. The economic potential of Africa is no longer confined to the export of minerals and the import of consumer products. We are fast developing our own capability to create products and services, not solely for export but to satisfy rapidly growing continental consumer demand.
One cannot take preconceived business models developed elsewhere in the world and impose them on diverse African economies without significant adaptation. Recognizing that Africa is not a single, homogeneous economic, trade or cultural zone is critical to planning entry into the continent and fundamental to any roll-out ambitions. What unites all countries across the continent, however, is the knowledge that Africa is on the verge of becoming an “influencer” on the world economic stage.
Corporate environments require predictability, which historically hasn’t been one of Africa’s strongest characteristics; but analyse the continent’s progress over the past decade and there is cause for optimism. In fact, regional “pockets of excellence” have emerged where investments can be made with both predictability and confidence.
In many industries, corporates recognize South Africa as the ideal “spring board” from which to launch sub-Saharan Africa expansions, since it ticks many of the predictability and regulatory boxes. Infrastructure is established, property and facilities meet global standards, and the investment environment is both regulated and reputable.
In a global comparison of real estate transparency indicators for property investment and operational environments in 97 countries, South Africa ranked 21st, ahead of all its fellow BRICS members, and alongside countries including Italy, Austria, Malaysia and Poland. The fact that it ranked as the continent’s only “transparent” market underpins South Africa’s reputation among global investors and corporate occupiers as the most desirable location to do business in Africa.
However, there are a number of key African property markets that in the medium term will equal if not surpass South Africa as investment and operational destinations. Property markets in countries such as Ghana and Kenya are improving on their “opaque status” and are already proving themselves to be suitable regional hubs from which to reach the significant and highly profitable East and West African production and consumer markets.
While foreign direct investment and the import of intellectual capital are critical to continuing momentum, the most exciting element of Africa’s economic dawn can be found in its own corporates, operating in familiar local economic environments. Many African markets rate poorly in global analyses, primarily because information is neither freely available nor publicized. This does not necessarily mean that these markets are unsuitable business or investment environments. Local corporates, familiar with “unpublicized” markets, have a distinct advantage in their ability to assess and capitalize on opportunities.
Commercial property in Africa is about to launch into a protracted boom. Whether investor or occupier, local knowledge and expertise are essential elements to any continental property strategy. Legislators across the continent need to focus on creating more transparent property rights and environments if city skylines are to keep pace with global interest and African ambitions.
Lastly, Africans must embark on active campaigns to promote achievements and opportunities, within the continent and beyond, as Africa surely proves itself to be one of the most exciting property environments on the planet.
Authors: Mark Bradford is Managing Director of Jones Lang LaSalle, South Africa.
Image:Office building under construction are seen in Angola REUTERS/Siphiwe Sibeko