Real estate transparency in Sub-Saharan Africa
Global Real Estate Transparency Index, 2018
Real estate transparency continues to improve gradually across Sub-Saharan Africa. However, the region is making advances at a more muted pace than in previous years, in an environment where expectations continue to rise. Further improvements will be essential to support the region’s drive for greater business efficiency and increased investment into real estate and infrastructure.
Gradual progress – with some bright spots
The 2018 Index shows a gradual increase in the region’s transparency, with 10 out of 15 markets registering improvements since 2016. South Africa remains Sub-Saharan Africa’s only ‘Transparent’ market, home to a significant institutional investor base and listed sector. Another four markets are considered ‘Semi-Transparent’ – Botswana, Mauritius, Kenya and Zambia.
Kenya and Nigeria – the leading hubs in East and West Africa respectively – have been leading progress over the past two years, while Rwanda has also continued to improve.
Further improvement required to shrink gap with other regions
However, the pace of change needs to accelerate to shrink the gap between Sub-Saharan Africa and other global regions. Sub-Saharan Africa still lags behind other regions in terms of market data availability, while enforcement of regulations and sustainability benchmarking are also among key areas where there is significant potential for improvement.
Real Estate Transparency in Sub-Saharan Africa
Source: JLL, LaSalle Investment Management
Looking towards the future
Going forward, four issues look set to determine how Sub-Saharan African transparency progresses in the future.
- The rise of ‘proptech’ – new technologies offer the potential for African markets to leapfrog traditional paths towards greater transparency and more efficient data collection;
- Deepening liquidity – increased market participation by institutional investors and the development of the listed sector are key to improving data availability and investment performance tracking;
- Regulatory enforcement – divergence between regulation and enforcement persists, and this will need to be addressed for markets to meaningfully raise their transparency levels;
- Sustainability practices – transparency around sustainability remains at an early stage and progression is key to ensure real estate reaches the standards required to meet the region’s future needs and aspirations.