Hotel and property groups are spreading their wings extensively across the continent and speeding up commercial property developments in the process.
Several new developments are offering eager SA retailers the opportunity to expand their presence beyond the country’s borders.
The property services group JHI, with assets of more than R40bn under its management, is already doing business in eight African countries and now also has Zimbabwe and Tanzania in its crosshairs. The other countries are South Africa, Mozambique, Namibia, Lesotho, Ghana, Nigeria, Botswana and Zambia.
Marna van der Walt, CE of JHI, says Africa is the least developed continent and the world cannot afford for it to still be underdeveloped in 50 years from now. “It is therefore vital that future-orientated companies establish partnerships to accelerate development in Africa.”
She says JHI is involved in 18 projects in Africa with a combined value of $300m, which include hotel developments, offices and shopping centres.
Wayne Wright, business development director at JHI, says the group regards Zimbabwe and Tanzania as burgeoning countries that are ready for a turnaround.
“Zimbabwe has the potential to turn itself around quite quickly, despite the problems.”
He says it could become a sought-after business destination, not only for SA, but also for the global market.
JHI has established partnerships with local partners, largely comprised of developers in Mozambique, Zambia, Ghana, Nigeria and Botswana, while its operations in Lesotho and Namibia are fully owned. It mainly entails property and project management activities.
The group’s project and development teams in Ghana are involved in a new five-star hotel in Accra as well as a new industrial plant in Takoradi. In Lagos, Nigeria, the group was appointed as the rental agent for the 30,000sqm space in the Portal Parks Mall.
Wright says there is great interest from SA retailers and the anchor tenants are Shoprite and Game.
He says the group is also busy with the letting of the new 40,000sqm Matola Mall in Mozambique. He says Shoprite and Pick n Pay are the anchor tenants while 80% of the space has been taken up by SA retailers.
The international Rezidor hotel group, which already has various hotel projects in Africa, is now taking its first steps in Rwanda. The group is busy with the development of the Radisson Blu Hotel & Convention Centre in Kigali with 292 rooms and a conference facility of 32,000sqm.
It forms part of a massive development for mixed use which will include a retail and entertainment centre.
The Rezidor group is expected to open a new Radisson Blu hotel in Lagos as well as in Addis Ababa in Ethiopia, Maputo in Mozambique and Lusaka in Zambia.
Andrew McLachlan, the Rezidor group’s head of business development in Africa, says the continent is one of the group’s core areas for future business development.
Africa as an investment destination is everything but the “dark continent” as it is sometimes referred to.
Roelof Horne, portfolio manager of Investec Asset Management, says Africa has not escaped the recent worldwide economic crisis, but it was a mere temporary disruption for positive long-term prospects.
He says the fact that Africa was financially isolated was the likely reason for this. With the exception of Mauritius which houses various branches of international banks, the African economies had significantly lower exposure to external bank lending practices.
The core conclusion is that there has been no real change to Africa’s economic growth expectations and the underlying principles that support it, in spite of the financial crisis.
His view of Africa’s long-term growth potential is that they will be unaffected.
Antoon de Klerk, macro-economic analyst at Investec Asset Management, says Africa is now in its tenth year in which its growth is exceeding worldwide economic growth.
According to a recent report by the International Monetary Fund (IMF) Africa’s economy grew by 1,9% in 2009, against the world economic growth of 0,8%.
The expected economic growth for Africa in 2010 is 4% while it is 3,1% for the whole world.
De Klerk says political stability is still one of Africa’s biggest challenges. “However, when viewed from a historical perspective, competitive politics and peace have never as widespread as now.” – Elma Kloppers, Sake24
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