High returns attract real estate funds to Africa
High stakes for high return, if you can stick it out for the long term - investors are buying into a boom in sub-Saharan African real estate.
High stakes for high return, if you can stick it out for the long term - investors are buying into a boom in sub-Saharan African real estate.
Forecasts for 20 per cent net annual returns from investing in shopping centres, office blocks or industrial complexes in countries from Zambia to Kenya are drawing in new investors, despite more immediate concerns in some countries about Ebola, terrorism or political stability.
Investors have already taken a liking to sub-Saharan African dollar debt, encouraging a record US$10 billion in sovereign and corporate issuance last year and US$5 billion this year, according to Thomson Reuters data.
But when even bonds from Kenya and Senegal offer yields of only 5 or 6 per cent, enthusiastic risk-takers may choose to invest on the ground in Africa.
The number one reason [to invest] is return - 18 to 20 per cent on an annual basis
Momentum Global Investment Management is launching a US$250 million sub-Saharan real estate fund later this year, focusing initially on shopping centres and office buildings in countries such as Mozambique and Rwanda. The fund has a life of up to eight years, so it will not be a fast way to make a buck - but Momentum expects it to be lucrative.
