Africa: the next big investment hotspot?

A growing population. New developments launching. Buyer interest rising. Could Africa be the next big investment hotspot on the global property map?

Agents say yes. Bolstered by President Obama's recent visit to Africa, which shone a spotlight on Africa's role in the world economy, the sentiment surrounding the country is improving.

Africa's population is already enjoying the fastest growth rate of any continent, with numbers expected to double over the next 25 years. According to Knight Frank's Africa Report 2015, by the year 2100, nearly 40 per cent of the world's population will live in Africa.

With more people comes more need for housing, which opens up the market for potential development.

Indeed, rapid urbanisation and rising income levels have created significant demand for residential property across Sub-Saharan Africa. According to the Uganda Bureau of Statistics, Uganda is facing a current housing shortage of 550,000 units, with 100,000 of these in Kampala alone.

To help meet demand, Property Frontiers has recently launched a collection of luxury apartments at Jakana Heights in the Ugandan capital. Available for investment from just $80,000 USD, the exclusive gated community is offering yields in the region of 15 per cent NET, the kind of returns usually associated with more established global markets.

"Urbanisation is occurring faster in Sub-Saharan Africa than anywhere else in the world as migrants move from rural to urban settlements," comments Property Frontiers CEO Ray Withers. "The real estate sector will play a major role in shaping Africa's urban future, as city infrastructures develop and demand for low and middle income housing increases."

Increased political stability on the continent and participation in local partnerships is also contributing to the improving public and investor perception of the country: Uganda, for example, has experienced political stability and continuous economic growth for nearly 30 years. With neighbouring Kenya, Tanzania, Burundi and Rwanda, it is benefiting from free trade between member countries and cooperation on major infrastructure projects, including a planned high-speed link from Mombasa to Uganda.

Africa's rapidly expanding middle class is already attracting investors, notes Withers.

"To add to the success story, oil has been discovered in Uganda in significant quantities, and will give rise to the requirement for office space and oil refineries, which will therefore create a ripple effect on other areas of the economy," he adds.

Indeed, Africa's share of global Foreign Direct Investment (FDI) has now reached the highest level in a decade, according to a new Ernst & Young survey.

Interest is being noticed on a wider scale in the industry too: The Property Investor Show, which takes place in London from Friday 9th October to Sunday 11th October, will be home to the UK's only 2015 showcase of property from West Africa, in particular Nigerian developer Eko Atlantic, Adron Homes, Clifton homes Ltd, FBN Bank, Africa Property Invest and FdiAFRICA.

This year, for the first time ever, the show is also teaming up with Overseas Property Professional to hold an international networking day, which will provide face-to-face opportunities for international developers and master agents to meet the best local agents and brokers.

For more information on the Property Investor Show, click here. To book a place with the OPP Events networking day, click here.