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 along with increasing supply in major markets.

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

in which 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: “in which 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 along with 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 along with 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 in which may be the case, the region is actually incredibly diverse along with opportunities in completely new markets along with completely new segments are constantly presenting themselves.

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

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

Commenting on insight through the sector report, Tom Mundy, head of sub-Saharan Africa Research for JLL, said: “Sub-Sahara Africa economies are far through mature, although some are further down the road to maturity than others along with 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 along with 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 through fluctuating exchange rates along with slumping inward investment, yet others have benefited through more balanced economies, less political intrigue along which has a lower reliance on commodity cycle than others.”

With saturation in key markets, investors are getting shrewder about understanding demand along with developing product in which best caters to in which.

In in which regard, JLL sees high growth inside the budget along with midscale space which has been overlooked whilst investors focused on the more prestigious segments.

Investment is actually driven by local entrepreneurs along with 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 along with in which is actually creating a gap in value expectations between these investor groups.

With an expected increase in liquidity, in which gap should narrow.

Nijnens said the reality is actually in which effective lending on hotel assets remains challenging in sub-Saharan Africa along with in which is actually reducing transactional liquidity along with supply growth.

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

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