RESEARCH
AFRICA REPORT 2017/18
REAL ESTATE MARKETS IN A CONTINENT OF GROWTH AND OPPORTUNITY AFRICA REPORT 2017/18 RESEARCH
CONTENTS AFRICA: STILL RISING? 03 Africa: still rising? The rise of Africa’s economies has been interrupted by recent external shocks, 08 Capital markets review but there remain grounds for optimism over the longer-term outlook. 10 Sector focus: retail After decades of disappointing 12 Sector focus: logistics FIGURE 1 performance, African economic growth African GDP in current US$ 14 Algeria began to accelerate around the turn of 15 Angola the century. The continent averaged GDP growth of more than 5% per annum 2,000 16 Botswana between 2000 and 2014, primarily driven by fast-growing Sub-Saharan economies. Cameroon 1,500 17 During this period, the term “Africa Rising”, 18 Chad popularised by publications such as The Economist, became shorthand for this 1,000 19 Côte d’Ivoire rapid economic growth and the increased optimism about Africa’s future prospects. US$ billions) GDP (Current 500 20 Democratic Republic of the Congo However, economic growth has since 21 Egypt 0 moderated, due primarily to the exposure 22 Equatorial Guinea of African countries to external factors 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 including falling commodity prices and 23 Ethiopia slower growth in China. The International Source: World Bank/Knight Frank calculations Monetary Fund (IMF) estimates that 24 Gabon and commodity-exporting countries Nigeria entered recession in 2016, African GDP growth slowed to 3.4% in since 2015. The major oil exporters, in while the IMF expected Angola to 25 Ghana 2015, easing further to 2.1% in 2016. particular, have been impacted by low record zero growth for the year. Smaller Growth for the Sub-Saharan region was 26 Kenya estimated at just 1.5% in 2016. Against oil prices, but more resilient growth rates oil-driven economies, such as Equatorial have been seen in oil-importing countries. Guinea and Gabon, have also been 27 Madagascar this backdrop, the question “is Africa still severely impacted by the decline in rising?” has moved to the forefront of Within Sub-Saharan Africa, the drop in commodity prices. 28 Malawi economic debate. GDP growth can be largely attributed to 29 Mali the region’s three biggest economies; Although South Africa is a net oil A multi-speed Africa Nigeria, South Africa and Angola. As importer, its growth has been subdued 30 Mauritania The headline GDP figures disguise Africa’s two largest oil exporters, Nigeria by weakness in the mining and 31 Mauritius the increasingly multi-speed nature of and Angola have both seen oil revenues manufacturing sectors and the effect African economies. In broad terms, there badly hit by lower prices, and this has of a severe drought on agricultural 32 Morocco has been a divergence between the additionally put strain on government production. The country only narrowly growth rates of commodity-importing spending, debt levels and currencies. avoided entering recession in 2016. 33 Mozambique
34 Namibia FIGURE 2 FIGURE 3 35 Nigeria Sub-Saharan Africa GDP growth Sub-Saharan Africa GDP growth rates rates by decade 36 Rwanda 6 10% 37 Senegal 5.64 8% 5 ESTIMATE
38 South Africa FORECAST 4.06 6% 39 Tanzania 4 3.79 3.33 4% 40 Tunisia 3 2% 41 Uganda 2 1.70 0% 42 Zambia 1.01 1 Compound annual growth rate (%) rate Compound annual growth -2% 43 Zimbabwe 2010 2011 2012 2013 2014 2015 2016 2017 0 1960s 1970s 1980s 1990s 2000s 2010s 44 Africa commercial occupier guide to date
47 Knight Frank in Africa Source: World Bank/Knight Frank calculations Source: International Monetary Fund
2 10% 3
8% ESTIMATE FORECAST
6%
4%
2%
0%
-2% 2010 2011 2012 2013 2014 2015 2016 2017