West Africa’s real estate sector is set to experience a period of sustainable growth, property experts have said. The industry leaders made their predictions ahead of this year’s annual West African Property Investment (WAPI) Summit.
The Summit, which is the region’s most prominent and largest real estate investment and development conference, will once again be taking place in Lagos on the 15th and the 16th of November, 2018. WAPI connects the most influential local and international Africa property stakeholders.
According to the Summit’s host, API Events’ Kfir Rusin, this year’s theme: ‘RE-Calibrating Supply and Demand for Sustainable Growth’ is a natural evolution of the previous year’s theme, ‘Changing the West African Narrative’, which aided more than 400 delegates representing over 200 companies to reposition the sector in a region sparked to a growth footing by Nigeria’s exit from recession.
“The market has undergone a shift, which is most evident in the changing retail and office occupier market,” Rusin explained in a statement issued this week.
“To help our 500 delegates unpack these changes – we’re pleased to announce that we’ve secured more than 60 well-known regional and international thought leaders to speak at WAPI 2018. These include, Broll Nigeria’s CEO, Bolaji Edu, regional legal authority, Olasupo Shasore (SAN), Ali Djire, Fraym’s Country Manager and PwC Nigeria’s Chief Economist Andrew S Nevin,” he continued.
As the head of one of the region’s largest multi-disciplinary commercial property services providers, Broll’s Bolaji Edu, position provides him with a unique position to gauge how the market has re-calibrated post-recession.
“If we analyse the grade-A office market in Lagos and the overall retail mall market following the economy entering a deep recession in 2016; take up dropped by approximately 40% (offices) and 55% (retail) between 2016 and 2017. However, as the economic recovery strengthens, we have seen numbers flatten out, and we expect to see an increase over the whole of 2018 from the low point of 2017,” said Bolaji.
Bolaji argues that while the drop-off proved to be challenging, it did enable the market to strike a balance, especially at the height of investment – with property values reaching sky high levels. This boom, he says can be attributed to the post 2007 global recession economy whereby investors fuelled by low interest rates entered emerging markets aggressively searching for high yields.
“We don’t expect to see the same level from the institutional international investment community, which lead to emerging market currencies being too strong and artificially inflated the size of the economies and the size of the middle class in US Dollar terms,” Bolaji elaborated.
Following this inflation and subsequent re-adjustment, Bolaji believes that the market is now on a more long-term stable footing. He notes that the market has begun to rebase itself down from a level where rent levels and capital values in parts of Lagos were comparable to the wealthiest cities in the world such as New York and the out skirts of London.
“Developers and investors in the market are examining building size and design that better reflect the target market. It is important to entertain best practices and the latest trends from around the world, but we need to tailor our projects,” said Bolaji.
It has emerged that due to the region’s market size and growing demand from the middleclass, retailers and companies still wish to establish a presence in Nigeria.
As the market continues to evolve and re-calibrate in line with economic development, Bolaji has noted that the demand continues to be driven by the high end and budget segments.
“These are the two areas that we see most enquiries from investors, developers, retailers and corporates,” he said.
“I believe Bolaji’s presentation and together with other leading panelists will aid us in achieving our key objectives of identifying the critical shifts in consumer, occupier and retailer demand, and how these changes will shape the future of the industry,” Rusin concluded.