Africa’s wealth continued to expand in 2018 – and with growing prosperity come high property prices. AfrAsia Bank released its annual Africa Wealth Report recently, with 2018 showing some interesting wealth trends on the continent.
Despite a slow economy and ongoing uncertainty about land reform, South Africa maintained its position at the top of Africa where wealth is concerned. However, with several other African countries developing rapidly, the country will have to work hard to maintain its position.
While still the wealthiest nation in Africa, South Africa recorded the second-weakest wealth growth over the past decade at just 2%. This is in stark contrast to Mauritius, the continent’s top 10-year performer, which saw its wealth increase by 195% over the same period.
Mauritius, Egypt, Kenya, Nigeria and Rwanda are some of the best-performing up and coming African economies in 2018. Their newfound wealth is reflected in their growing property markets.
Jhb and Cpt at the top of Africa’s rich list
Johannesburg kept its place as the wealthiest African city, with total wealth of $276 billion. The city’s sheer size and level of development making it hard to beat in terms of overall property value.
Cape Town racked up an impressive $155 billion to take second place on the continent. This is a major achievement, given the city’s relatively small size compared to Johannesburg.
Cape Town – Africa’s most expensive property per square metre
Cape Town is not only the continent’s second wealthiest city but also has the highest property value per square metre.
- At $6,100 (R86,500) per square metre, Cape Town property is more than twice as expensive as the average price of $2,800 in Johannesburg and $2,900 in Durban.
- While smaller than Johannesburg, the Mother City has proven its ability to attract top property prices over the years.
- Although the Africa Wealth Report was cautious about South Africa’s property market in the wake of land reform, many experts still believe that Cyril Ramaphosa will manage the process wisely.
If so, there is good reason to be optimistic about the future of both residential and commercial property in Cape Town.
Marketing commercial property to Africa’s wealthiest clientele
The Africa Wealth report also reveals an interesting trend where commercial property investments are concerned.
African investors become increasingly likely to buy commercial property as they progress from dollar millionaires to multi-millionaires, centinairs (with assets valued over $100 million) and billionaires.
While residential property appeals to almost all high net-worth individuals in Africa, commercial property investors fall squarely above the $10 million wealth level.
This indicates two things for the industry:
- The continent’s super-wealthy have great confidence in commercial property as an asset.
- Property professionals will need to strive for extremely high levels of service in order to satisfy clients of this calibre.
As Africa continues its growth and becomes increasingly prosperous, Cape Town’s developed commercial property sector is poised to benefit. With a growing market of high net worth individuals from all corners of the globe, the Mother City is perfectly positioned to provide office space for investors, wealth managers, and new businesses.
This could result in excellent price growth, rental yields and overall returns over the years – and the best time to invest may be right now.
To view our portfolio of prime commercial property in greater Cape Town, contact one of our area specialists today.