REAL ESTATE GHANA

Ghana 2018 | CONSTRUCTION & REAL ESTATE | B2B

Rising incomes, other stable macroeconomic indicators, and technology integration are propelling real estate development and investment in Accra and beyond.

Bright Owusu Amofah
BRIGHT OWUSU AMOFAH
CEO
Rendeavour: Appolonia City
Joseph Aidoo
JOSEPH AIDOO
Executive Director
Devtraco Limited

What investments and projects do you currently have in the pipeline?

BRIGHT OWUSU AMOFAH We have two major ongoing projects in Ghana. One is called Appolonia City in Accra, and the other is King City in Takoradi. Both of these projects are subsidiaries of Rendeavour, currently the largest urban land developer in Sub-Saharan Africa. We are in five countries with seven active projects. Appolonia City is our advanced project in Ghana, and we look to kick start the Takoradi project in 2018. For the Appolonia City project, we acquired land in Accra, which is growing rapidly. There is an industrial component, a retail component, commercial, retail, and leisure. Over time, people will not have to drive to cities but can operate from there. It helps place less pressure on the existing infrastructure.

JOSEPH AIDOO For Ghana, we are currently planning a 1,000-acre, master planned gated community, which will likely be the largest in West Africa. The group is also doing other projects in the high-end sector. We are building a three- to four-star hotel, a 10,000-sqm shopping mall, a 10,000-sqm office, and 520 apartments in the heart of Accra. We are also doing a 30,000-sqm development in Airport Residential, another 240 apartments in Roman Ridge, and a beach resort in Ada anchored by a four-star hotel chain. Additionally, we have taken steps to expand into other regions as well. Presently, we have signed a development deal with Nasscorp, Liberia's largest pension fund, establishing a company called Pan African Homes. We are currently starting to put in the infrastructure. Within three years, we will hand over the first 1,000 units. Thereafter, every year we will add another 1,000 units.

What are your recommendations for someone looking to invest in Ghana's real estate market?

BOA The market has changed significantly. There are many opportunities in retail, perhaps 1,000 or 2,000sqm at most. Income levels are increasing, and Ghanaians are getting more exposed. The price points between open markets and shopping malls are leveling out. There is still a great deal of demand on the outskirts of Accra. As of now, we do not offer investors the possibility of buying land in our current projects, but we are always looking to refine our business model and are flexible. We have launched a project called Nova Ridge to sell land to individuals. We are moving into a great deal of construction on our own as well.

JA For investors, it is necessary to identify what their yield needs are before then identifying the right asset class that will give them that yield. Then, they need to research the developers in that asset class and find someone that is trustworthy and reliable. Ghanaians respond well to new projects. When it comes to real estate or real assets, people are apprehensive about being the first ones to buy. It becomes a gradual build up of trust, and when people finally know that a company is here to stay, they will open up. It is all about the right product at the right price. Right now, there is an excess of supply of Grade A office development that can be filled up quickly through increased business activity. Regarding affordable housing, there is definitely a market there as well. There is definitely a huge growth curve coming in leisure and business hotels. The outlook for real estate in my view is definitely positive.

What role does technology play in your projects?

BOA Our projects are long term in nature, in 15- to 20-year cycles, and our target is 90,000 people in over 2,500 houses. We cannot afford to think short term. If we look at global trends, smart cities will happen and catch up with Africa. This is happening with telecoms; Africa basically leapfrogged the market. The same thing will happen with other industries. Real estate is certainly an industry that will not be left behind. In our roles, we have future-proofed our projects by putting in fiber-optic dots. The key is offering at the right time at the right price point and assessing when the market is there. Affordability is key, and that affects all application of ICT, particularly in having an integrated system.

JA Our long-term strategy is to maintain our position and continue to deliver on our promises regarding our quality. We also want to continue to build on technologies that push down costs, reducing prices for buyers as well. However, the moment we start to think we are comfortable and safe is when we lose our position. Our short-term strategy is to continue to be relevant with design and stay up to date on market trends, always with an eye on what people seek. We also use insurance bonds to hedge the more traditional risk, although one can never really mitigate a business risk.