Tuesday, September 25th, 2018, Accra, Ghana – At a Gala held within the Airport Residential Area in Accra, industrialist and visionary Nana Kwame Bediako, proudly and formally launched the Kwarleyz Residence by Kwarleyz Group.
Designed without precedent and with integrity, precision and passion, Kwarleyz Residence serves as a 40-unit, fully furnished serviced estate, located in the prestigious community of the Airport Residential Area. Managed by Ascott Limited and hosting a glass facade overlooking Aviation Road, Kwarleyz Group celebrated at the launch its rich history in combining architectural creative ingenuity with breathtaking natural views, buttressed by a sophisticated living experience.
Kwarleyz Residence is indeed one of the many landmark developments under the wing of the Kwarleyz Group and its subsidiary, Wonda World estates, the latter, a leading real estate enterprise in Ghana, with over 500 homes having been developed in contemporary fashion.
Nana Kwame Bediako, CEO of Kwarleyz Group, Capital Nine Zero and Wonda World, stated: "Not only will Kwarleyz Residence be recognized as the first internationally-operated serviced apartments in Ghana, it will also be the ultimate address for individuals, families and businesses seeking a premium lifestyle, previously unavailable, despite Accra’s rich history. For the first time ever, Ghana will play host to a 5-star residential experience."
With faculties including a swimming pool, state of the art gym facilities, a detailed spa with adjoining sauna and steam room, a stunning roof garden, coffee shop and café, coupled with an exclusive, all-day-dining restaurant and sky bar overlooking Accra, Kwarleyz Residence intends to craft a profound, lasting imprint within the Ghanaian market and beyond.
"Today's launch of Kwarleyz Residence is in honour of my mother, the woman who has stood behind me and supported my dreams well before they were realized. In Ghanaian culture, people tend to spend more money in celebrating life in past-tense. It is my honour to designate this world-class development to my mother as she is alongside me; a personal blessing for me to be able to honour my mother in this regard, so that she can see the legacy I’ve created for our family, a symbol of industrialization for others to follow," Bediako continued at the Gala.
The Gala was attended by many commercial and political dignitaries, such as the first Lady of the Republic of Ghana, former President J.A Kuffuor, the Mayor of Accra, and many other key Ministers.
A home is everyone’s priority. We need it to survive, for protection from the elements and even to satisfy our egos. According to the last Census recorded in 2010, about 47 percent of Ghana’s population is homeowners.
The majority of the population is left to seek other means of finding shelter due to affordability challenges. Renting, for the most part, is the best alternative for such house-hunters. In reaction to this phenomenon, the Rent Control Department was created to ensure a favorable rent environment. Leading real estate portal Lamudi Ghana highlights five facts about renting that active and potential tenants should know.
Tenants should be made aware that Ghana’s current legislation. The Rent Act of 1963 demands that landlords charge a maximum six months rent in advance. Unfortunately due to demand outstripping supply, landlords charge in excess, sometimes demanding up to three years rent advance.
This has been a controversial issue for many years. Does a house-hunter benefit from the protection of the Rent Act or only when he or she is a tenant? The answer is the latter. According to a Senior Rent Officer at the Rent Control Department, Mr Philip Skido Deh, a house-hunter can only negotiate on the terms of a landlord. However, upon becoming a tenant, the landlord is to charge not more than six months rent in advance when the initial period expires. A tenant is fully protected by the law in this case and should take the matter up with the Rent Control Board, which will ensure that the proper thing is done.
Ghana’s Rent Act has been in existence for over 50 years now. The last time it was amended was in 1986. This situation has attracted the need for a review of the law to reflect modern standards. According to Mr Deh, a proposal has been made to the government to have the current rent advance changed to one year to keep in track with modern practice of landlords.
Another important aspect of the law that both tenants and landlords should know, rental increments can only be made after three years of the initial rent charge. A tenant is protected by the law to seek redress if a landlord arbitrarily increases the rent. Again, due to high demand some landlords take advantage and increase rent charges as it suits them.
Even when a landlord’s desire is to increase his or her rent charge, it has to be done with the full knowledge of the Rent Control Department. The landlord is not permitted to increase rent without the approval of the Department. Anything else means going contrary to the law.
Mr Sammy Amegayibor, the Executive Director of Ghana Real Estate Development Agency, has appealed to government to reduce fuel prices in order to cushion the business community against the current economic challenge.
He said government should look at the importance of taxes from a bigger perspective of the real estate industry.
Mr Amegayibor told the Ghana News Agency that the government stood to lose more if businesses collapse or experience contraction rather than growth.
The country has been experiencing power cuts for some months now and this has not only affected homes but industries, including real estate.
He said the high cost of purchasing fuel for power generators would not only affect the real estate sector, but also the economy as a whole.
"I believe that when you have a problem you should look at the checks and balances. In this case, the government is losing out because businesses are folding," he added.
He said if it was government’s duty to collect taxes to develop the nation and the businesses themselves are folding, then government is losing out on its source of income.
The Executive Director said in this current situation, it would be more prudent for the government to remove some of the taxes on fuel, reducing the price of fuel was crucial to the business community because most of them now tend to buy fuel for power generators to support productivity.
Ms Akua Nyame-Mensah, the Managing Director of Lanudi Ghana, said there was the need for the country to focus on sustainable energy development.
She said investment in solar energy and sustainable building would save the country hundreds of megawatts of energy.
She said the short-term solution would be to introduce some form of tax relief to the business community in order to ensure its survival.
"Currently, start-ups will be facing a huge challenge just to survive with the current power crisis, while other business units may have to fold up as a result," she said.
She was of the opinion that sustainable energy building were key to ensuring not only the survival of the business community, but crucial to cutting costs to government."
A number of geopolitical risks have caused instability of the world economic growth and made investors look for where to invest money safely and profitably. The real estate sector is one of the few which have not lost their credibility among investors. The most forward-thinking investors are paying more and more attention to the African continent, where the retail and residential property market is growing dynamically, surpassing all expectations of its popularity among specialists.
China has recently become the world’s major exporter of capital and thus gave a boost to diversification of global investment strategies into property. According to the Financial Times, the outgoing direct investments of China exceeded the internal ones in 2014. As shown in a recent report of CBRE, the top global real estate advisory firm, Chinese investments into international commercial real estate property totaled $ 40 billion last year exceeding the numbers of 2013 ($ 32.5 billion) by 23 %.
Mark Giuffrida, CBRE’s Executive Director, Global Capital Markets (Asia), commented on the global real estate market situation: DzLast year was very important for the sphere of international property investment: we observed accelerated implementation of capital due to stimulation by a combination of structural and cyclical factors occurred when new capital entered the market. According to our estimates, this key trend will continue in 2015. We already observed the Chinese and Taiwanese insurers starting to operate more actively in international real estate markets in the second half of 2014dz.
Africa has been the China’s largest investment site for the past few years. China has invested into more than two thousand African projects so far, including agriculture, infrastructure facilities, manufacturing sector and logistics.
Inflow of foreign investments, a significant share of which belongs to China, has played a crucial role in the dynamic economic development of African countries. According to the Financial Times citing a joint report of the African Development Bank (ADB), the United Nations (UN) and the Organization for Economic Cooperation and Development (OECD), the inflow of foreign investments into African economy was $ 84.3 billion in 2014, which set a record in its history. African economy grew by 4.8 % in 2014 against 3.9 % rise of the previous year. The projected acceleration of growth for this year is up to 5–6 %, the same as during the pre-crisis period.
Experts say that African real estate market is going to develop rapidly in the short run. Moreover, the legislators across the continent have focused on the development of extremely transparent laws for the protection of property rights in order to make the growing cities in Africa meet the international interests and their own ambitions. In the opinion of James Roberts, the Director of Knight Frank (the research department for real estate markets), the commercial property market will take leading positions: "The volume of investments in world office real estate was $ 202 billion in 2009, and we expect it to grow to $ 606 billion in 2015. As part of this global trend of rapid progress, office markets of developing African countries will also be dynamically expanding in terms of investment activity, among which are particularly noteworthy Kenya (particularly Nairobi), Botswana, South Africa and Nigeria. Cape Town, Johannesburg, Lagos and Dakar, as well as Dubai, which caters to the growing African investment flow of capital, are strategic hubs of the continentdz."
Great prospects for the development of commercial real estate market are expected in sub-Saharan Africa. Due to rapid urbanization there is a rising demand for modern structure real estate and commercial real estate of high class (Class DzAdz), which the region is sorely lacking. According to The Globe and Mail portal, it is projected that investments in shopping centers, office buildings and industrial complexes of these countries benefit at least 20 % per annum of net income. That is what attracts the global investors expecting large income in the long run.
The ultra-high income has already attracted a number of foreign companies involved in the construction and subsequent management of property. Oleg Yantovsky, the head of the Russian branch of Hermes-Sojitz, an international investment foundation, and a member of Hermes-Sojitz’s Board of Directors, confirms the profitability of the real estate development business in Africa: "The realities of the African real estate market significantly differ from the real estate markets of the developed countries. However, this fact is rather an advantage than a disadvantage. The rate of return on investment is higher indeed in emerging markets. It is essential that the risks accompanying any development project on construction of commercial and residential real estate property are much higher. Nevertheless, it is possible to minimize them by choosing a consistent approach". Hermes-Sojitz international foundation is an investor of the construction of 65-storey skyscraper and several shopping centers with over 100 thousand sq. m. space each in West Africa. The total investment volume of the projects implementation in Africa is $ 3 billion until 2017. In addition to Hermes-Sojitz, there are some other corporations investing in the African development business. Momentum Global Investment Management fund launches a $ 250 million project on construction of shopping centers and office buildings in countries such as Mozambique and Rwanda. Actis company has already invested $ 500 million in real estate markets of Nigeria, Zambia and Mozambique and expects high profits.
Investment fund managers confirm that the income and purchasing power of the people of Africa are growing, and migration to the cities is a continuous process, which fuels the demand for real estate. DzThe growing middle class need to meet, communicate and spend their free time in shopping malls, restaurants and cafes, which are not inferior to European and American counterparts. This desire will become stronger,dz said David Morley, the Head of the Real Estate Department of Actis, a private equity firm.
The massive influx of foreign capital had a positive impact on the transparency of commercial real estate market. The residential real estate market can also be considered as a profitable sector for investment. The anticipated profit ratio will be slightly lower though. In order to attract local and foreign investors, authorities of some African countries make noticeable breaks in the tax policy of the housing sector. For example, the Nigerian government intends to reduce the percentage of mandatory registration fees on the purchase of residential properties from 16 % to 3 %.
Dynamic growth of the real estate value is observed in Dakar, the capital of Senegal, which is 250 % over the past few years, according to Global Property Guide portal, citing data from the National Statistical Agency of Senegal. Capital real estate market attracts investments of regional elites, because it is treated as a safe haven in turbulent West Africa. However, some foreign investors from Europe and America appeared at the local market in 2014, counting on a solid income in the long run.
A double-digit growth in property prices in Dakar is being recorded for several years due a sharp increase in the population (mainly due to migrants from rural areas of Senegal and affluent segments of the population of the neighboring countries).More than a half million residents of Dakar are tenants. Local rental charges were steadily increasing over the past two decades, and now are almost the same as in the largest cities in Europe. Property in the center of Dakar is almost twice as expensive as in the central business district of Abidjan, the commercial capital of Côte d’Ivoire, and many other capitals.
Some positive trends are observed in the real estate market in South Africa. After six years of stagnation the South African housing is rising in price, although the local economy is still reeling from the effects of the economic crisis. The number of foreign buyers is growing there again: they have invested $ 867 million in the country’s elite property during the first eleven months of 2014. The peaceful elections, stable political situation and depreciation of the local currency contributed to the return of foreign investors. The South African rand has fallen by a third since 2012, making local property more attractive. DzThe steady increase in housing prices in 2014 allows to predict a positive trend in 2015. The expected price increase will reach 7.5 %, and inflation-adjusted 2 %,dz describes ABSA report.
The findings of the Baseline Profitability Index from the investment of money in real estate ranking in 2014 also confirmed that African countries are eligible for investment. The ranking took into account factors such as the protection of investors, changes in exchange rates, the corruption situation in the country, political consistency, the average level of profit and other niceties.
The young diamond Republic of Botswana was at the top of the ranking. The African countries such as Senegal, Ghana and Rwanda entered the top ten ranking list, while European countries were the twentieth.
To sum up, international experts are unanimous in their forecasts regarding the prospects of the real estate market in Africa. This is caused not only by a high return of the capital employed in this sector, but also by minimized risks associated with doing business in Africa.
According to a new report by Knight Frank, an increased number of international investors are investigating opportunities in African real estate markets, attracted by the continent's startling economic and demographic growth prospects.
Based on Knight Frank's Africa Report 2015, the population of Africa will quadruple to over four billion by 2100, with nearly one billion of these people in Nigeria alone. This is arguably the single most important demographic trend that will shape the world over the course of this century.
The largest cities of Sub-Saharan Africa are growing at a rapid pace; Luanda's population is forecast to increase by more than 70% during the 2010-2025 period, while Dar es Salaam, Kampala and Lusaka are expected to double. Allied to strong economic growth, this is creating increased demand for good quality real estate of all types.
The retail sector has seen a huge increase in activity as a result of the rise of the urban middle class and the expansion of South African retailers such as Shoprite and Pick n Pay into the rest of Africa. Modern shopping malls are a relatively new concept in much of Africa, but a spate of new malls has been developed in key cities such as Accra and Nairobi.
Matthew Colbourne, associate, international research, said "The growth of Africa's cities and economies will do much to define the global socio-economic landscape over the coming decades. These major long-term trends are driving the construction of high quality real estate across the continent. The most visible demonstration of this is the rise of the modern shopping center concept in cities such as Nairobi, Lagos and Accra, but there are development opportunities in all property sectors.
"Large volumes of good quality commercial and residential property are needed to support the continuing African growth story, presenting excellent opportunities for global funds looking to diversify or enter into African markets."
Africa's growth potential has led to a notable increase in activity involving overseas investors and South African funds over the last two years.
Chinese investors' involvement in large-scale development and infrastructure projects across Africa has been particularly eye-catching. However, the Knight Frank report also identifies nine South African-based funds that have raised significant volumes of capital to invest in real estate projects across the Sub-Saharan region. These investors will develop a wave of modern investable assets that will do much to improve the size and maturity of African property investment markets over the next few years.
Peter Welborn, head of Africa, commented "We have seen rising interest in Africa from an increasingly diverse range of international investors, developers and occupiers in recent years. The inflow of investment from China into Africa has been well publicized, but there is also growing activity involving investors from elsewhere, including the rest of Asia and the Middle East. Meanwhile, an increasingly significant flow of capital has emerged from South Africa into other African markets.
"While many African countries remain challenging places in which to do business, there are high-growth opportunities across Africa for those able to those able to navigate their way through the markets."