Of the 16 West African countries, Ghana is ahead in real estate investment attractiveness index, according to a new report launched at the weekend by Panterra Real Estate Group.
The report titled ‘West Africa Real Estate Investment Attractiveness’ shows that Ghana is followed closely by Cote d’Ivoire, while Nigeria comes third. The report is based on ‘The Attractiveness of 66 Countries for Institutional Real Estate Investments’ by Karsten Lieser and Alexander Peter Groh.
Among other parameters, Ayo Ibaru, Panterra’s Chief Investment Officer, explained that the ranking of the West African countries took into consideration each country’s GDP size, GDP per capita, GDP growth, workforce, inflation, and innovation.
The reason for Ghana’s topmost ranking may not be far-fetched given the country’s real estate market’s strong value propositions. Besides high rental yields, there are also good returns on investment and capital appreciation.
The market boasts robust legal safeguards, strict regulatory compliance, and accessible entry points as definitive features designed to offer a secure offshore real estate alternative for foreign investors.
‘While turnkey residential properties average 8 percent to 10 percent yield across Ghana, a major developer like Devtraco Group projects a conservative average return on investment (ROI) of about 12 percent-denominated strictly in US dollars, not in Cedi, the country’s local currency.
Ewurabena Braye, Devtraco’s head of sales, assures of legal systems and security of investment, explaining that Ghana maintains a highly efficient commercial legal system tailored to safeguarding investors’ capital.
‘We have a very strong legal system in Ghana where you can either opt for arbitration or go through the normal legal court system,’ she stated, pointing out that commercial disputes in the country are typically resolved within three months to prevent capital tie-ups, while Alternative Dispute Resolution (ADR) and arbitration mechanisms resolve issues within two weeks to a month.
This contrasts sharply with the Nigerian system, where it takes forever to resolve commercial disputes involving real estate-land or fully developed assets. Again, in Nigeria, rental yield is still low at 4-5 percent for residential properties.
However, on ‘Real Estate Investment Opportunities’ in the sub-region, Nigeria tops the list, followed by Ghana. The ranking was based on institutional property estimation, degree of urbanization, urban population and growth, quality of infrastructure, and development of the services sector.
Investment opportunities in Nigeria speak for themselves. This is the most populous nation in Africa as a whole. The country has a very low homeownership level estimated at 25 percent of its over 200 million population.
The country’s housing deficit is in excess of 20 million units. It has a very active rental market where over 70 percent of the population lives in rented accommodation, spending over 50 percent of their annual income on house rent. Experts estimate that the country needs to build close to 300,000 housing units annually to close its housing gap.
Earlier at the launch event, Tayo Odunsi, Panterra’s CEO, had explained why the company had to come up with the two reports that were launched along with their new investment product called Panterrium.
Odunsi noted that real estate in Nigeria is an opaque sector with no standard repository for information. He recalled that 14 years ago, they founded Northcourt Real Estate to address transparency issues in real estate in West Africa.
He added that three years ago, they founded Build Africa Technology Company to solve transparency issues in Africa’s construction sector.
‘About nine months ago, Northcourt and Build Africa were merged into a much bigger and more capitalized group – Panterra Real Estate Group- with the same but even larger mandate to not only bring transparency to these sectors, but to help our clients profit from it, leveraging our technology, research, real estate and investment management capabilities.
Today, with you, our clients, investors, friends and families in attendance, we are pleased to launch two key reports that provide insight and transparency on the Nigerian construction market as well as the West African property market,’ he enthused.