Africa’s commercial property sector continues to grow and remains a good investment – but performance is not equal across the board.
With some property markets on the continent doing extremely well while others cool down, investors are taking a cautiously optimistic view of the continent.
Knowing what to expect from the property market – both in Cape Town and across the continent – is essential for investors. Here are some of the trends that are shaping the market today.
Africa is a big place – and it’s becoming more regional than ever
There was a time when foreign investors separated Africa into three blocs: North Africa, Sub-Saharan Africa, and South Africa.
Today, with countries across the continent developing along their own lines and finding economic niches, savvy investors are looking at local data when they make their decisions.
Broadly speaking, East African countries that rely on mineral imports have been outperforming their peers in Central and Southern Africa over the past few years. Their commercial property markets have followed suit.
- Cities like Nairobi have benefitted from this trend, with new office buildings springing up in the Kenyan capital.
- Several multinational companies are setting up regional headquarters in East Africa, which is planning to unite as an economic bloc in the near future.
Meanwhile, mineral exporting nations in West, Central and Southern Africa are feeling the pinch from slowing growth in China. The current trade spat between the U.S. brought on by President Donald Trump is also having a negative effect on commodities.
As a result, commercial property developers in markets that were very buoyant a few years ago are having to take a breather.
Unfortunately, South Africa’s economic slowdown has put it in this category too – but there is hope on the horizon.
Commercial property investment takes time – but it’s worth the wait
Despite slow economic growth over the past few years, both South Africa and Nigeria have seen continued investment in their commercial property sectors.
The market in Cape Town has weathered the storm well, with developers showing their confidence in the city. Despite a slow economy, several prominent developments have been completed.
- The V&A Waterfront is being revamped and upgraded, with new buildings having opened in the Silos development.
- The Foreshore has seen its property boom continue, with an entirely new skyline appearing as projects are completed.
- The Table Bay Mall has added to the city’s already excellent retail options – with more shopping centres in the works.
- Century City is set to become SA’s Silicon Valley with a recent wave in investment within the IT and high-tech manufacturing companies.
These projects alone represent billions of Rand worth of investments – and the trend shows little sign of stopping.
With developers and significant investors showing their willingness to invest in the Mother City over the long term, commercial property buyers have a unique opportunity to invest for the future.
Knowledgeable area specialists are indispensable investment advisors
If you’re keen to invest in commercial property in the Cape Town area, selecting the right office space is essential.
For your investment to deliver a competitive ROI, you’ll need expert advice from estate agents with an in-depth knowledge of the Cape Town market.
The Commercial Space team is ready and able to assist you in making the right property investment. Contact us today to view our portfolio of Cape Town office spaces.