Real estate investors turn to Africa on Mideast conflicts

Real estate investors turn to Africa on Mideast conflicts

A few years ago, many institutional investors regarded destinations in the Middle East such as Dubai as some of the best places to acquire real estate assets.

However, due to the recent conflicts involving countries such as Israel, Iran, Syria, Lebanon, Yemen and Jordan, investors are reporting how expensive it is to acquire property in the once lucrative stations.

As a result, international investors have begun to look towards markets they once overlooked such as Africa, that have demonstrated more stability and potential for growth over the long term.

“There isn’t a lot going on in the developed markets of the world given the turmoil both in terms of macroeconomic and political instability, so investors are seeing Africa as an interesting return opportunity for them,” says Mark Dunford, CEO of Knight Frank Kenya.

The lack of scalable projects has been a challenge that has previously kept these investors from tapping into the African market, but this is changing.

More aware of the investment risks on the continent, institutional investors are now partnering with local real estate developers to boost their capacity to put up large-scale, higher-grade projects that are likely to generate more revenue than today.

“We are witnessing this in rapidly growing regions such as Nairobi, where investors are driving the development of major projects in special economic zones such as Tatu City that are attracting foreign companies as tenants,” says Dunford.

Unlike individual investors who may purchase real estate just to keep their money safe, Dunford says these institutions are investing in real estate for profit.

These institutions will, therefore, generally tend to take into account the quality of the real estate assets before investing in them, as this will give them an indication of how the assets could perform.

“International money will not come in here and buy go-downs that are sublet to tenants who have short lease lengths, and who are paying their rent in shillings, considering what has been happening with the volatility of the currency,” poses Dunford.

If the warehouse, however, is of a quality that will attract global tenants who can pay their rent in international currencies such as the US dollar, then that is something that institutional investors would be willing to put their money in.

Dunford adds that institutional investors are often drawn to properties that can accommodate very large enterprises.

That is because these organisations are the ones that can afford to lease property for an extended period, which makes them the ideal clients for investors, who tend to have a long-term view.

“When you engage some of these investors, what they will tell you is that we don’t want to go and own one supermarket in Nairobi, we want to own a supermarket chain with 50 branches across Africa, that is a sizable portfolio,” states Dunford.

Alex Njage, head of commercial property at Bowmans Kenya, says the positive thing about having more institutional investors coming into Africa is local developers are having to put up buildings of international standards for them to remain competitive.

“If an investor can find the same quality of buildings in Nairobi as they would in Dubai at a lower price, then they have no reason to go to Dubai. We are seeing more grade A offices come up in Nairobi, as well as world-class hotels, among other high-quality assets,” posed Mr Njage.

Developers are also incorporating sustainability in their projects to remain attractive to investors who tend to assess whether a building has factored in the health and well-being of its occupants, as well as whether it has factored in measures to reduce the impacts of climate change.

ESG considerations

“There is a growing pool of climate finance and accessing this finance requires that developers have a very clear outline of ESG considerations in their projects,” notes Mr Njage.

The use of modern building concepts such as biophilic design and nudge architecture has thus become common.

These designs connect buildings and their occupants to the nature around them, thus ensuring that the biodiversity is maintained and if it is lost, then it is restored.

Power efficiency, waste and water management are elements that have also become critical, and therefore some developers are leveraging the use of smart building technology to incorporate features such as automated lighting to reduce energy consumption.

“Big brands coming to look for space expect to have green-certified spaces because they know the benefits that come with such spaces. They are even willing to pay higher rent,” notes Mr Njage.

Modern projects that incorporate sustainability are not only attracting international firms as tenants but also some local companies such as those that are eyeing the export markets.

“Before a buyer in Europe decides to purchase goods from a supplier in Kenya, they would want to be sure that the goods are being processed in a clean space. So, tenants are moving to better spaces to satisfy their clients.”

The downside of this is that the older buildings are starting to perform poorly, with local owners having to contend with lower rents.

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Tanzania Confirms Second Marburg Outbreak After WHO Chief Visit
Tanzania Foreign Investment News
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Tanzania Confirms Second Marburg Outbreak After WHO Chief Visit

Dar es Salaam — Tanzania’s President Samia Suluhu Hassan has declared an outbreak of Marburg virus, confirming a single case in the northwestern region of Kagera after a meeting with WHO director-general Tedros Adhanom Ghebreyesus.

The confirmation follows days of speculation about a possible outbreak in the region, after the WHO reported a number of deaths suspected to be linked to the highly infectious disease.

While Tanzania’s Ministry of Health declared last week that all suspected cases had tested negative for Marburg, the WHO called for additional testing at international reference laboratories.

“We never know when an outbreak might occur in a neighbouring nation. So we ensure infection prevention control assessments at every point of care as routine as a morning greeting at our workplaces.”Amelia Clemence, public health researcher

Subsequent laboratory tests conducted at Kagera’s Kabaile Mobile Laboratory and confirmed in Dar es Salaam identified one positive case, while 25 other suspected cases tested negative, the president told a press conference in Dodoma, in the east of the country today (Monday).

“The epicentre has now shifted to Biharamulo district of Kagera,” she told the press conference, distinguishing this outbreak from the previous one centred in Bukoba district.

Tedros said the WHO would release US$3 million from its emergencies contingency fund to support efforts to contain the outbreak.

Health authorities stepped up surveillance and deployed emergency response teams after the WHO raised the alarm about nine suspected cases in the region, including eight deaths.

The suspected cases displayed symptoms consistent with Marburg infection, including headache, high fever, diarrhoea, and haemorrhagic complications, according to the WHO’s alert to member countries on 14 January. The organisation noted a case fatality rate of 89 per cent among the suspected cases.

“We appreciate the swift attention accorded by the WHO,” Hassan said.

She said her administration immediately investigated the WHO’s alert.

“The government took several measures, including the investigation of suspected individuals and the deployment of emergency response teams,” she added.

Cross-border transmission

The emergence of this case in a region that experienced Tanzania’s first-ever Marburg outbreak in March 2023 has raised concerns about cross-border transmission, particularly following Rwanda’s recent outbreak that infected 66 people and killed 15 before being declared over in December 2024.

The situation is particularly critical given Kagera’s position as a transport hub connecting four East African nations.

Amelia Clemence, a public health researcher working in the region, says constant vigilance is required.

“We never know when an outbreak might occur in a neighbouring nation. So we ensure infection prevention control assessments at every point of care as routine as a morning greeting at our workplaces.”

The Kagera region’s ecosystem, home to fruit bats that serve as natural reservoirs for the Marburg virus, adds another layer of complexity to disease surveillance efforts.

The virus, closely related to Ebola, spreads through contact with bodily fluids and can cause severe haemorrhagic fever.

Transparency urged

Elizabeth Sanga, shadow minister of health for Tanzania’s ACT Wazalendo opposition party, says greater transparency would help guide public health measures.

“This could have helped to guide those who are traveling to the affected region to be more vigilant and prevent the risk of further spread,” she said.

WHO regional director for Africa Matshidiso Moeti says early notification of investigation outcomes is important.

“We stand ready to support the government in its efforts to investigate and ensure that measures are in place for an effective and rapid response,” she said, noting that existing national capacities built from previous health emergencies could be quickly mobilised.

The situation coincides with leadership changes in Tanzania’s Ministry of Health, with both the chief medical officer and permanent secretary being replaced.

This piece was produced by SciDev.Net’s Sub-Saharan Africa English desk.

Source: allafrica.com

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