African countries are likely to embrace sustainable buildings this year, a new report has stated.
The report with the title “2023 Africa Real Estate Trends to Watch Out For” was published by Estate Intel.
It noted that there were approximately 300 green buildings in Africa outside of South Africa, while this number was nowhere near the 120,000 global green buildings. Markets such as Nairobi, Accra and Lagos have recorded over 200 per cent increase on average in the past three years.
“Notably, access to financing has been the lead driver for the majority of developers and investors steering the momentum towards green. This has resulted in major transactions across the continent such as the announcement of the largest syndicated sustainability-linked real estate debt facility secured by Grit in 2022 and organised by Standard Bank.
“Interestingly, this momentum towards green adoption has not only been at the private sector but also at the public sector level. Cairo’s Capital Garden City development initiative is perhaps the most notable initiative by Governments to drive ‘green affordability’. The development features approximately 25,000 units under development in the ‘Green Housing’ initiative aimed at driving energy and water efficiency,” it stated.
According to the report, while Nigeria has had limited green building activity, it ranks second to Kenya at 64 per cent on the matrix in terms of the adoption potential, with significant progress being made towards green building legislation and its commitment to Net Zero by 2060.
The report further noted that affordable housing and data centres would be the key alternative sectors to watch out for.
“Although rarely viewed as an asset class across the continent, affordable housing is making a comeback. While this momentum has been steered by governments across Kenya, Zambia, Nigeria and Egypt, the challenge of a gaping housing deficit is set to result in the unlocking of institutional investor interest.
“So far Kenya’s new government is looking to put up approximately 200,000 housing units per annum. While this ambition has been viewed as too ambitious, it could very well initiate specialist funding vehicles focused on the sector in the market.
Similarly, the recent trend of expansion in the data-centred market has seen data centres rise to the top five sectors for investments in the Africa deal flow tracker. Equinix’s debut into the South African market through a 4MW facility in Johannesburg as well as the recent Africa Data Centres announcement to expand into Rwanda and revamp its operations in Nairobi are some of the key expansion announcements recorded across the continent. With the sector still in its nascent stages, it is set to see more investments and new builds in order to fully support the whole African continent in 2023,” It added.