- Property developers hold the largest share of each residential market in Accra, Lagos, and Nairobi, with a major focus on luxury and deluxe properties.
- Lekki Phase 1 has the highest amount of pipeline developments in Lagos, while East Legon and Tema are among the top areas with pipeline developments in Accra, and the Central Business District is the top area in Nairobi.
- Government organizations are more concerned with affordable housing, but most residential developments are expected to be in the luxury and deluxe categories, alienating middle-class citizens.
In a bid to understand the African residential landscape and identify the major players in Africa’s major cities – namely Accra, Lagos, and Nairobi – we analyzed the residential markets, compared the stock, and the key players in each sub-market of these cities.
Here are a few of our key takeaways from the report:
Property Developers Hold the Largest Share of Each Market
A running theme across all three cities is property developers holding the highest share of each residential market with a major focus on luxury and deluxe. For instance, according to the data Estate Intel is tracking, property developers hold 66.2% of the total market share in Lagos; compared to Government organizations and private individuals.
Analyzing the total stock among the top 20 property developers in each city,
- Devtraco and Clifton are some of the top developers in Accra with 10% and 6.1% respectively;
- UPDC and Landwey are some of the top developers in Lagos with 4.5% and 6.2% respectively;
- Buxton Point and Centum group are among the top developers in Nairobi with 8.7% and 8.1% respectively.
Lekki Phase 1 has the highest amount of pipeline developments in Lagos
In our analysis of ongoing and conceptual developments in Lagos, Lekki Phase 1 was highlighted as the area within Lagos with the most pipeline developments. With more than 1,000 units in the pipeline, it has been a prime location for residential developments for the past 5 years due to high demand from a teeming young population and its proximity to key business hubs like Victoria Island and Ikoyi.
Over there in Accra Ghana, East Legon and Tema are among the top 3 areas with pipeline developments. The high interest in Tema currently stems from the refinement of the Accra-Tema motorway and the good infrastructural facilities and social amenities which makes it attractive for people to live which has driven residential development in the area. While the developments in Tema are more affordable, East Legon is characterized as a high-end market. As a result, available land within the area is driving the development of new high-end projects in Accra.
While the Central Business District area is so far the top area in Nairobi with pipeline developments. Due to urban regeneration, as a result of changes in land tenure, there is renewed interest in the council estates that are closer to the city centre. As a result, the government is focused on redeveloping estates such as Pangani and Ngara under the affordable housing scheme to bridge the housing gap.
Developers in Accra have been incentivized to build Deluxe developments
Based on the data we are tracking, the majority of developments under construction or completed by property developers in each city are within the deluxe and luxury categories. For instance, Ghanaian developers currently have about 19,000 units of residential buildings in the pipeline. However, about 85% of them are expected to be luxury and deluxe-grade properties.
In 2019, the “Year of Return” led to an increase in rental and sales prices of properties. However, the unprecedented demand for vacation rentals and investment properties shifted the focus away from affordable housing developments. Since then, the city responded with new residential developments and the introduction of incentives for developers to focus on the luxury aspects of the market. These incentives include tax relief and duty waivers for luxury projects that cost over USD 40 million.
Government organizations are more concerned with affordable housing
Among the key players in these cities – broadly classified into government organizations, private individuals, and property developers – government organizations are more dedicated to meeting the needs of low-middle-income citizens with affordable housing schemes.
This is evident in Nairobi and Lagos, whose governments have championed multiple affordable housing schemes. In Lagos, LSDPC has put in place multiple schemes such as which have provided over 2,000 units of affordable housing to date. While in Nairobi, the previous government kicked off an initiative to provide 250,000 units yearly from. While they fell short of their target by the end of their tenure, the new government has renewed efforts to ensure that affordable housing units are delivered.
What is the outlook of the African Residential Market?
Overall, the outlook for the market is mixed. While there is continued market activity in each city to deliver residential developments, most of them are expected to be within the luxury and deluxe categories. Thus alienating middle-class citizens that are heavily driving the demand for affordable and inclusive housing schemes within the cities. There is still a huge gap between the demand and supply for low-income earners, which so far, only the government and a few property developers are looking to bridge.
Subscribe to ei Pro for full access to the comprehensive report on the Residential Developers Dominating Africa’s Major Cities report
We love your feedback! Let us know what you think about the Residential Developers Dominating Africa’s Major Cities by sending an email to [email protected].
Author – Bisi Adedun