The impact of COVID-19 on African economies has been severe, with revenue across several economic sectors vastly reduced. For the real-estate economy, the ensuing recessionary environment will result in a ‘significant slowdown in overall capital flows into the sector, especially for the office, retail and hospitality sub-sectors’.
This is according to the event report from the 11th Africa Property Investment (API) Summit held at the end of September. The report states that rather than the crisis causing ‘fundamental shifts’ within the African real-estate sector, it accelerated key pre-existing structural trends.
While the worst-affected sectors were the hospitality, entertainment and retail industries, the industrial, corporate residential and offices were the most resilient. Other trends included an increase in the flexible-office and coworking sector, the adoption of technology in African real-estate, as well as a shift away from relying on international investment.
The pandemic also highlighted a need – spurred by ‘further downward pressure on pricing and rentals’ –for greater diversification into emerging sub-sectors such as student accommodation and data centres. There was also an increased focus on healthcare facilities and affordable housing.