New opportunities emerge in Africa as Broll looks beyond 2021 towards the recovery of the real estate market

“Our success is based on our deep knowledge and expertise, based on our tangible understanding of local markets across Africa. This enables us to provide end-to-end real estate solutions based on strategic and fully integrated real estate services for the occupant and investor segments, ”said the CEO of the Broll Group. Malcolm Horne.

“As a leading provider of end-to-end real estate solutions, an interesting correlation that we are tracking is the potential relationship between the roll-out of vaccination in Africa and the associated economic recovery across the continent,” said Horne. This is especially important for Broll’s mission to leverage its leading patented technology platforms to improve asset value in a sustainable real estate market.

Broll maintains a diverse portfolio of clients and services in 13 African countries, including Botswana, Cameroon, Eswatini, Ghana, Ivory Coast, Kenya, Madagascar, Mauritius, Mozambique, Namibia, Nigeria, Réunion, Seychelles, South Africa, Uganda and Zambia. B-BBEE Tier 1 and 51% owned by black women, it has leased 737,325m2 of retail space across Africa in the past five years.

“Our vision is to be the leading provider of professional real estate services and the preferred place of work for real estate professionals. We are gradually striving to develop collaborative partnerships, based on transparency and mutual trust, which serve to build lasting customer relationships. As we continue to expand, we are committed to these principles, which have served our group and our customers since 1975, ”says Horne.

“It is important to be focused on the future, and while we are all anxious to return to the ‘new normal’, it happens differently in different countries,” said Jose castiho, Managing Partner of Broll Mozambique. For example, while elsewhere there is a tendency to accelerate the return of multinationals to the office, this trend is not yet so noticeable in Mozambique.

“Besides the Covid-19, other factors have affected the oil and gas projects under development in our country. These were temporarily halted, which had a major impact as they are the main engines of our economy. The good news is that these are expected to restart from 2022 to 2024, ”says Castiho.

As Mozambique waits for its oil and gas sector to rebound, many companies are taking the opportunity to reorganize their offices and move to higher quality buildings. “This is actually what we plan for the next 24 months, as companies are obligated to ensure that their workspaces comply with all Covid-19 regulations,” says Castiho.

This trend will stimulate demand for grade A and grade A + office buildings. While there is currently a 30% vacancy rate, vacant spaces are expected to be occupied as new developments will take three to four years to bring to market. “This could have a positive effect on office rents, which we expect to increase over the next 24 to 36 months,” says Castiho.

Maputo’s residential market reflects the growth of the commercial sector, with an increase in the number, quality and location of buildings in order to attract multinational clients. Some investors have benefited from lower prices due to higher vacancy rates and as a result, they have an increased appetite for the rental segment market in the near future.

In terms of new opportunities, Castiho highlights the booming tech industry, where Broll Mozambique has helped fund start-ups, many of which have been successful. Castiho attributes this to a demand for ICT skills as the tech industry itself continues to grow rapidly.

While many multinationals have returned to the Uganda office, they still operate primarily on a rotational basis to reduce the number of people in post due to Covid-19 protocols, says Moses Lutalo, Managing Director of Broll Uganda. “In the short to medium term, this is going to have an impact on the space requirements for some of our customers who are considering reducing space. However, in the long run, I think the space requirements are likely to increase due to the increased need for social distancing. We are currently operating on a 10m2 per person model, but due to Covid-19 this is likely to increase significantly. “

On the investor side, the trend is towards diversified portfolios that include commercial, residential and industrial. Retail and hospitality, on the other hand, remain elusive for investment. In terms of occupants, safety, efficiency and durability are key decision factors for all sites. “We are also seeing an increase in owner-occupier developments, especially from government departments,” says Lutalo. In terms of emerging niche asset classes, these range from data centers to healthcare and even cold rooms, all segments that are gaining traction.

In Kenya, most multinationals still operate from home, with a slow return to the office. “As a result, the demand for office use has dropped dramatically. For the moment, there are few requests, and in particular these relate to smaller spaces ”, explains Meshack Kimatu, CFO at Broll Kenya. To counter this trend, investors are issuing flexible leases and improved business terms to attract tenants.

“On the other hand, developers can opt for buildings with flexible floors to tap into the new occupant requirement for smaller spaces. At the same time, we have seen emerging trends like affordable housing, which is championed by the government as one of its main social development programs, as well as the emergence of data centers, ”Kimatu said.

Ghana has seen a similar change in the trading space due to Covid-19. Multinationals are gradually returning to the office, but on a hybrid system, while back office staff in particular are still encouraged to work from home. “This trend is likely to have a negative impact on the occupation of space in the short term,” says Tony sekyere, CEO of Broll Ghana. Market information reveals that the average use of space has gone from a pre-Covid-19 level of 200 m2 to 350 m2 per transaction to a post-Covid-19 level of 100 m2 to 200 m2.

However, tenant sublet requests are on the decline due to increased business confidence following a strong vaccination rollout. “Overall, we have noted that the global financial crisis has dampened investor appetite for real estate investing. This is likely to affect the development pipeline, with most investors postponing speculative projects, ”Sekyere said.

Rentals of Category A space have declined in recent times, with owners offering incentives such as extended free periods and flexible payment terms to support occupant interest. The key emerging sector in Ghana’s real estate market is data center, mainly driven by the government’s digitization policy. “We expect this industry to continue to grow rapidly,” says Sekyere.

While interest in student housing has been fueled by a growing student body, real investment has been delayed in this segment as education has not yet returned to a ‘new normal’. Finally, Sekyere says the serviced office industry is gaining momentum, with occupants opting for more flexible, cost-effective options that also promote the well-being of their workers.

“Long-term trends in the Nigerian real estate market are currently unclear and difficult to project,” says Bolaji Edu, CEO of Broll Nigeria. Lagos, in particular, has a distinct national and multinational market segment, with little overlap between the two. The occupancy rate for Class A office buildings is currently below 40% as workers continue to work from home or switch to a hybrid model.

“This leads to a fairly pessimistic short-to-medium forecast,” Edu said, with Class A office space usage in the first half of 2021 at its lowest level since Broll started tracking the market. “We do not anticipate a significant increase in the second half of 2021. However, with the deployment of vaccinations and the introduction of vaccine passports, business travel should rebound and revive commercial activity. That being said, multinationals with Nigerian operations are unlikely to reverse the spatial consolidation plans they have already started to implement. “

Any change or disruption in the market is likely to see the emergence of new trends, and Nigeria is no different. “Affordable housing and social housing remain an important topic of discussion. Other sectors experiencing increased institutional activity and with long-term growth prospects include student housing, data centers, and healthcare and medical practices, ”said Edu.

Distributed by APO Group on behalf of Broll Property Group.

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