Zambian investors pump money in real estate
Zambia’a pension funds and insurance companies have invested $445m and local developers have invested $80m in new property developments between 2014 and 2017, according to Urban Africa Property Group.
“There is a lot more local and international money in Zambia’s property market than people think,” Carl Johan Collet, Managing Partner of Urban Africa Property Group, said.
“Between 2014 and 2017, we have tracked more than $1.3bn in direct investment into the Zambian property market,” he said.
The lion share of this investment has been by Foreign Direct Investments (FDIs) predominantly into cash flow generating properties with Lusaka’s retail sector by far the largest recipient.
“We have tracked more than $715m in FDI with 74.6% invested into Lusaka and the remainder into the Copperbelt region and Livingstone,” he said.
Having spent four years tracking foreign and local investment into Zambia commercial real estate, the money invested by international and domestic institutional investors into different sectors certainly paints a bullish and distinct picture of the country’s real estate market, according to Collet.
The majority of FDI he said, 56% to be exact has gone into “cash flow generating properties”, while 44% have gone into the development.
“Retail is by far the most popular asset class with 64% of the investment while office, hospitality and residential has each received 10-13%”, respectively, of funds, invested,” said Collet.
While the continued investment into Zambia’s retail sector has called for some developers and retailers warning of a rapid saturation in the sector, Bonna Kashinga, Partner, Chief Finance & Operations Executive at Urban Africa Real Estate Group, pointed out that the market still has more room to grow.