Logistics Africa 2016
Total Page:16
File Type:pdf, Size:1020Kb
RESEARCH LOGISTICS AFRICA 2016 SUB-SAHARAN AFRICA’S EMERGING LOGISTICS PROPERTY SECTOR LOGISTICS AFRICA 2016 RESEARCH FIGURE 1 Sub-Saharan Africa prime LOGISTICS PROPERTY TRANSPORT INFRASTRUCTURE logistics rents IN AFRICA CHALLENGES 25 The logistics sector is an emerging focus for property Overcoming Africa’s poor transport infrastructure is a major 20 development in Sub-Saharan Africa. challenge to logistics operators. Modern logistics property is currently support modern retailing, distribution and Poor transport infrastructure is an Africa. Current major projects include the example, projects underway exploring 15 scarce across much of the Sub-Saharan manufacturing practices. inhibitor to the growth of many African East African standard gauge railway which the use of cargo drones. Foster + region, but there is a growing need for logistics markets, with road and rail links aims to connect Kenya, Uganda, Rwanda Partners has unveiled plans for a Key property investor/developers such high quality new development. Driven between key economic hubs remaining droneport in Rwanda, which would be 10 as Actis and RMB Westport, responsible and South Sudan, and the West Africa rail largely by the growth of Africa’s middle patchy. Although there is a Trans-African used to transport medical supplies and for many of Sub-Saharan Africa’s most loop connecting Côte d’Ivoire, Burkina U$S PER SQ M MONTH classes and the associated expansion Highway network, first conceived by the commercial goods via unmanned flying modern property developments, have to Faso, Niger, Benin, Togo and Nigeria. 5 of its consumer markets, there is rising United Nations Economic Commission vehicles. Drones could allow logistics date largely focused on retail and office However, infrastructure improvements will demand for high quality logistics space for Africa in the 1970s, large parts operators to move goods to locations projects and there has been limited struggle to keep pace with the astonishing from retailers and consumer goods remain unbuilt and many sections are without reliable road networks and may 0 activity in the logistics sector. However, speed at which Africa’s cities and manufacturers seeking to expand in poor repair and essentially unusable prove to be a “leapfrog” technology logistics development activity is on economies are growing. Kigali Abuja Accra Dakar Lagos Harare as trade routes. The cost of moving Nairobi Lusaka Luanda Abidjan their African operations and improve for Africa, in the same way that mobile Maputo Kampala Lilongwe Kinshasa the rise, and Actis is a partner in York Gaborone Windhoek Cape Town distribution networks and supply chains. goods in Africa is, on average, estimated Innovative solutions have been proposed telecommunications have allowed many Addis Ababa Commercial Park, a modern development Johannesburg Dar es Salaam Such occupiers demand properties built to be two or three times higher than in to overcome Africa’s challenging Africans to skip fixed-line networks and in Lusaka, Zambia, which is Actis’ first Source: Knight Frank Research to high technical specifications that developed countries and transport costs transport infrastructure. There are, for move straight to wireless technology. major logistics project in Africa. can represent as much as 50-75% of the Other investors seeking to expand their retail price of goods. The poor quality of Sub-Saharan portfolios have been recently road and rail networks forces logistics active; for example, Mara Delta – a companies such as DHL Express to Logistics Performance Index, 2016 – Top 20 countries fund created from the merger of Delta transport the majority of its cargo by air. in Sub-Saharan Africa Africa and Mara Diversified Property The LPI is a World Bank survey of operators providing feedback on the logistics Traffic congestion within major cities “friendliness” of countries Holdings – has acquired the Bolloré/ can also impact logistics operators. Plexus warehousing complex in Pemba, In some cities, including Lagos, there Sub-Saharan Global Rank Country LPI Score Mozambique. Middle Eastern developers are restrictions on lorry movements Africa Rank (out of 160) (out of 5) have also targeted the sector; Kuwaiti- during the day, forcing deliveries to be based Agility has ambitious plans to create made at night. It can therefore be in the 1 20 South Africa 3.78 a network of logistics hubs across Africa, interests of both local governments and 2 42 Kenya 3.33 while Dubai’s DP World has been granted property developers for logistics parks a concession to develop and operate a 3 57 Botswana 3.05 to be located well away from busy city The Port of Durban new logistics centre in Kigali, Rwanda. 4 58 Uganda 3.04 centres. Congestion around seaports and competition for limited warehouse 5 61 Tanzania 2.99 As with all commercial property sectors, space has also led to a trend towards the 6 62 Rwanda 2.99 the logistics market in South Africa FIGURE 2 is the largest and most sophisticated development of inland dry ports. Logistics market drivers in Sub-Saharan Africa 7 79 Namibia 2.74 in the Sub-Saharan region. There are In Lagos, logistics development has been Responses from logistics industry professionals to the question: “What do you perceive to be the 8 81 Burkina Faso 2.73 most significant driver of growth in the emergence of Africa’s logistics market?” numerous modern logistics parks across encouraged away from the city itself, and 9 84 Mozambique 2.68 South Africa, and new developments two of the main industrial areas serving 30% 10 88 Ghana 2.66 continue to add to the country’s stock. Lagos are in neighbouring Ogun State; 2015 2016 Ongoing and upcoming development the Agbara Estate, to the west of the 11 90 Nigeria 2.63 25% projects include Lords View Industrial city, is a well-established industrial area, 12 92 Togo 2.62 Park and Klipriver Business Park near while a new hub is emerging at Sagamu, 20% 13 95 Côte d'Ivoire 2.60 Johannesburg, Cornubia Industrial and to the north of Lagos, where Nestlé has 14 98 Comoros 2.58 Business Estate and Clairwood Logistics established a factory. In Nigeria, power 15% 15 100 Niger 2.56 Park in Durban and Montague Business supply issues are also a major concern for Park in Cape Town. logistics operators, and many companies 10% 16 107 Burundi 2.51 % OF RESPONDENTS require that they are located at industrial South African logistics property 17 109 Mali 2.50 parks served by gas pipelines. 5% developers are increasingly looking to 18 114 Zambia 2.43 transfer their expertise to projects in the There are numerous large-scale transport 0% 19 115 Benin 2.43 Growing middle Mineral and New oil and Rapid Stronger Increased FDI rest of Africa, and this may result in a infrastructure projects currently underway class and consumer resource gas discoveries infrastructure agricultural 20 125 Republic of the Congo 2.38 wave of new development across the rest across the continent, which should help spending demand development demand Source: World Bank of the continent. to improve transport connectivity within Source: Transport Intelligence 2 Please refer to the disclaimer at the end of this report 3 LOGISTICS AFRICA 2016 RESEARCH SKIKDA RADES PORT PORT TANGER Algiers Tunis MED Rabat Tripoli PORTS OF Casablanca ALEXANDRIA / DAMIETTA EL DEKHEILA PORT PORT 1 SAID SUEZ CANAL PORT DEVELOPMENTS Cairo TRANSPORT 1 INFRASTRUCTURE Around 90% of Africa’s trade happens by sea, 3 2 IN AFRICA making its ports crucial points in logistics networks. 4 Trans-African Highway network Despite its reliance on sea transport for international trade, Sub-Saharan Africa’s PORT SUDAN Cairo - Dakar ports are small by global standards. 1 Nouakchott Durban, the region’s busiest container 2 Algiers - Lagos port, handles approximately 2.7 million PORT OF Dakar Khartoum twenty-foot equivalent units (TEUs) DAKAR 3 Tripoli - Cape Town Niamey DJIBOUTI per year, less than one-thirteenth of Banjul PORT 5 6 the volume handled by the world’s Bamako Kano N’Djamena 4 Cairo - Cape Town Bissau Ouagadougou Djibouti busiest port Shanghai. Over the coming Conakry 5 Dakar - N’Djamena decades, the ports of Sub-Saharan Addis Ababa Africa will require substantial expansion Freetown Lagos 6 N’Djamena - Djibouti and modernisation in order to cope with 7 Monrovia LoméCotonou the greater trade volumes that should Accra Dakar - Lagos Abidjan 7 accompany its population growth and Bangui Yaoundé 8 economic development. PORT OF DOUALA 8 Lagos - Mombasa ABIDJAN PORT Kampala There are currently a large number of port PORT Libreville 3 Beira - Lobito Badagry, Nigeria OF TEMA PORT 9 development projects proposed or under OF APAPA Nairobi construction across Sub-Saharan Africa, The Badagry MegaPort and Free involving both the expansion of existing Brazzaville Mombasa Zone project is located about 55 km Kinshasa facilities and the creation of entirely PORT OF west of Lagos. It is expected to MOMBASA Major cargo airports new ports. Five of the largest new port Dodoma have an annual throughput capacity Dar es Salaam Major container ports schemes are highlighted on the map to the of 1.8 million TEUs and is being Luanda 4 PORT OF right. A common feature of many of these DAR ES SALAAM Major new port developments developed by a public-private PORT OF projects is the involvement of Chinese LUANDA partnership involving a private firms, whether as investors financing the Lobito 9 consortium led by the Dutch port projects or contractors building them. The PORT OF operator APM Terminals. LOBITO most ambitious of the new port schemes aim to become the dominant ports within Lusaka their regions; for example, the new ports Harare Lekki, Nigeria Lamu, Kenya at Lamu in Kenya and Bagamoyo in Tanzania are being positioned to compete Lekki Deep Seaport is situated within Beira PORT OF PORT LOUIS Lamu Port is planned for construction BEIRA (MAURITIUS) with existing ports at Mombasa and Dar the Lagos Free Trade Zone (LFTZ), about 300 km north of the existing es Salaam to be the largest in East Africa.