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Commercial real estate set to benefit as African urbanisation accelerates
JOHANNESBURG, 03 Dec 2013 – A new research report by Jones Lang LaSalle on Africa, reveals that, as the world’s most rapidly urbanising continent, the Sub-Saharan African commercial real estate market is primed for a “once in a lifetime” positive growth opportunity, supported by expanding middle classes, new infrastructure investment and deepening corporate footprints. Whilst Africa’s natural resources have long been attractive to foreign investors, growth in manufacturing, technology and telecoms, finance, outsourcing, retailing and hospitality sectors, is creating an urgent need for modern commercial real estate.The report, entitled, “The African Century: Twelve Pillars of Africa’s Future Success” identifies 12 key factors that are underpinning the rapid evolution of 40 key cities across the continent. Africa’s evolving urban network is creating a significant growth platform for the commercial real estate sector.According to report author and Global Research Director at Jones Lang LaSalle Jeremy Kelly: “Many Sub-Saharan African cities are showing remarkable dynamism. Accra, Addis Ababa and Maputo are among the world’s fastest growing city economies; Luanda and Lagos currently house some of the world’s most expensive commercial real estate due to severe supply-demand imbalances. Meanwhile Nairobi is emerging as a regional technology powerhouse, known as Africa’s ‘Silicon Savannah’. This rapid evolution of cities across Sub-Saharan Africa is translating into a high-energy phase of real estate development as the industry responds to rapid urbanisation and strong demand from businesses and consumers for modern commercial offices and shopping malls.”“With only 2 million square metres of Grade A commercial office space in the whole of Sub-Saharan Africa (excluding South Africa), the office stock is barely equivalent to that of Edinburgh or Auckland, providing for a population of 830 million people. Despite concerns over poor transparency, the real estate opportunities are clearly evident, with an increasing number of investors keen to access Africa’s frontier markets. For many investors and corporations, the long-term potential in Sub-Saharan Africa is too great to ignore,” added Mark Bradford, Chairman for Sub-Saharan Africa at Jones Lang LaSalle.