The leading Pan-African real estate provider, Broll Property Group, anticipates that the African real estate market might not return to pre-COVID levels until 2023.
In a press release issued before speaking at this years African Property Investment Summit, Broll Group CEO Malcolm Horne outlined that due to the relatively slow vaccination uptake across the continent, he expects Q1 of 2023 to be the time when Africa’s real estate market begins to return to normal.
Horne clarifies: “Hopefully by Q1 2023, the supply and demand issues related to the vaccines will largely have been resolved, with a sufficient supply to Africa so we can gain momentum across the continent in terms of the vaccination drive. That will be positive and see the start of a ramp-up in economic activity. In most countries, people are back in the malls and spending. It is crucial that lockdowns are not instituted again, which is why the successful vaccine rollout is so critical.
“Hence by the start of 2023, African economies will start to normalise and head back to pre-Covid-19 levels of activity. We are already seeing this shift globally, where economies have plans in place for job creation, reshaping and expansion by as early as the end of the year. However, we do not anticipate any significant movement in the investment market until probably Q2 next year.”
Despite the difficulties posed by COVID-19, Broll remains “comitted” to what it calls “future-focused thinking” that is essential to developing new partnerships and opportunities throughout Africa.
On an international level, one of the strongest sectors is industrial. Along with this, data centres and healthy lifestyle establishments also see positive turnover despite the global crisis.
The situation in Africa is more or less the same, with hospitals understandably also having been at the forefront of much development.
During the pandemic, Africa has seen secondary emerging investment sectors that are rapidly gaining traction, including cold storage, self-storage facilities and affordable housing.
However, despite the positivity, it is not all good news. As we previously covered on Commercial People, South African tourism continues to slump. This sentiment is emphasised by Horne, who concedes: “The real challenges lie in offices, retail and hotels.”
In terms of the office sector, while a general return to the office environment is predicted by Q3 this year, Africa is an interesting exception due to the slow vaccine rollout. As such, many companies are still working fully remotely as a result.
However, Horne does not expect the office sector to shrink in size necessarily. Horne states: “Offices are going to have to be repurposed for increased spacing between workers, which will result in fewer employees per square metre and the adoption of more flexible workspace solutions. Hence there will be fewer people, but the space will remain the same.”