AHIF 2017: Sub-Saharan Africa offers completely new opportunities to investors

AHIF 2017: Sub-Saharan Africa Offers Completely New Opportunities To Investors

The hotel sector in sub-Saharan Africa has evolved during the past decade due to high demand growth, entrance of completely new global brands in addition to increasing supply in major markets.

AHIF 2017: Sub-Saharan Africa Offers Completely New Opportunities To Investors

This kind of is actually the overview presented by Xander Nijnens, executive vice president, Hotels & Hospitality Group, JLL sub-Saharan Africa, during AHIF 2017.

AHIF 2017: Sub-Saharan Africa Offers Completely New Opportunities To Investors

Nijnens said: “This kind of evolution is actually resulting in increasingly experienced investors developing products in which are better suited to address demand, which is actually providing a clear shift in focus to the domestically driven midscale in addition to budget segments.”

AHIF 2017: Sub-Saharan Africa Offers Completely New Opportunities To Investors

The report confirms hotel operating performance in sub-Saharan Africa in 2016 in addition to 2017 has been challenging.

AHIF 2017: Sub-Saharan Africa Offers Completely New Opportunities To Investors

There is actually little doubt in which the long-term investment case is actually strong, yet the economic slowdown has impacted demand at a time when completely new supply growth has been strong in many markets.

AHIF 2017: Sub-Saharan Africa Offers Completely New Opportunities To Investors

Nijnens said in which while This kind of may be the case, the region is actually incredibly diverse in addition to opportunities in completely new markets in addition to completely new segments are constantly presenting themselves.

AHIF 2017: Sub-Saharan Africa Offers Completely New Opportunities To Investors

Supply growth within the sector is actually continuing, ownership structures are evolving, liquidity is actually increasing, in addition to many completely new prospects are becoming apparent in both alternative markets, secondary cities as well as product diversification.

Commenting on insight by the sector report, Tom Mundy, head of sub-Saharan Africa Research for JLL, said: “Sub-Sahara Africa economies are far by mature, nevertheless some are further down the road to maturity than others in addition to as a region we are turning increasingly optimistic on the outlook for the next 12-18 months.

“While we acknowledge the lack of homogeneity across the region in addition to in which some countries will grow at a faster pace than others, we believe in which the region has turned a corner after the recent commodity driven slump.

“Yes, some markets have suffered by fluctuating exchange rates in addition to slumping inward investment, yet others have benefited by more balanced economies, less political intrigue in addition to a lower reliance on commodity cycle than others.”

With saturation in key markets, investors are getting shrewder about understanding demand in addition to developing product in which best caters to This kind of.

In This kind of regard, JLL sees high growth within the budget in addition to midscale space which has been overlooked whilst investors focused on the more prestigious segments.

Investment is actually driven by local entrepreneurs in addition to diversified corporates, with foreign capital being deployed into the sector at a lesser rate.

These local investors cost risk differently in their home markets than global investors in addition to This kind of is actually creating a gap in value expectations between these investor groups.

With an expected increase in liquidity, This kind of gap should narrow.

Nijnens said the reality is actually in which effective lending on hotel assets remains challenging in sub-Saharan Africa in addition to This kind of is actually reducing transactional liquidity in addition to supply growth.

AHIF 2017: Sub-Saharan Africa offers completely new opportunities to investors

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