Cashing out on the real estate boom in Africa

Aug 21, 2015 | | Say something

If there is an industry that is bound to grow in leaps in the coming decade or more in Africa, it is real estate. Both commercial and residential real estate are hot sectors in all major African cities. From Dakar to Nairobi, from Lagos to Cairo, from Algiers to Johannesburg, the supply just cannot keep up with the demand.

Investing in real estate properties for renting or selling seems to be the most straightforward way to get a piece of the real estate action. Real estate, however, is not a low cost business. Land cost in cities are multiple times the yearly income of the average citizen. Property development does not come cheap and getting loans from local banks is not an easy understanding to say the least. Individually, it is therefore quite a stretch to build a scalable real estate venture.

Here are a couple of alternatives to get into the real estate game:

-Partner with other same-minded business people to gather enough capital to invest in real estate projects. I know this is easier said than done in Africa but when it come to real estate, going alone is simply, in most cases, not an option.

-Invest in cities outskirts, or smaller cities. Even if it is just land, the growth potential is huge in many African cities, even when you are far from the city centre or commercial districts.

-As per the popular saying, in the gold rush, one should sell shovels to get rich. The growing real estate industry means there is more demand for products and services that are related to it: brokerage services, valuation services, trucks for carrying the sands, furniture, home decoration you name it. You need to take a deep breath and spend the time to understand your local industry, the pain points of the developpers and buyers, and come up with services, solutions and products with excellence in mind to establish a sustainable and scalable niche for yourself.

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