African Property REITs: The Future of Real Estate Investing in Africa

Property is an excellent long-term investment, but it can be challenging to understand the market and find opportunities.

With so many players in the real estate sector, it can be hard to know who to trust and how to pick quality properties.

Africa has its fair share of real estate players, and some of them focus specifically on assets in Africa. These properties are also known as African property REITs, and they are expected to boom in the near future. In this blog post, we’ll explore the benefits of investing in African property REITs, as well as their risks and potential rewards.

Why Invest in African Property REITs?

A great deal of attention has been focused on investing in developing countries, with many cautioning that these markets are too volatile to be suitable for long-term investments. In the case of Africa, there has been particular focus on the real estate sector.

Real estate is almost always a popular investment choice, but especially in Africa where it has a long and colorful history.

Real estate in Africa has been used as a tool for economic development for many years, and it is currently experiencing a boom due to rising income levels and urbanization.

Unsurprisingly, real estate is also a popular investment in these countries. In fact, some estimates suggest that half of all Africans want to invest in real estate, but that only 10% of them actually do.

Risk management benefits

One of the main reasons to invest in African property is to gain access to some of the best real estate markets in the world. The African continent has a rich history, and a large number of investors are looking to get their hands on some of the most attractive properties on the planet.

African countries are expected to be some of the most exciting real estate markets in the world. Kenya, for example, is renowned for its safari properties, and investors are flocking to Tanzania to get their hands on properties close to game reserves. South Africa is experiencing a property boom, with wealthy foreign investors snapping up properties in cities such as Johannesburg and Cape Town.

Furthermore, many investors are interested in expanding their portfolio with exposure to emerging markets, and African property provides this opportunity. Emerging markets such as Turkey and India, while very promising, are often very risky and volatile. African property, on the other hand, is regarded as a safe investment with solid fundamentals.

African property REITs: A new asset class

African property is a new asset class that has grown out of the need to create a more stable and predictable investment vehicle in the region. Unlike many other real estate investments that are often linked to local or international economies, African property is linked to the African continent alone. As such, it is not affected by the ups and downs of other countries.

Furthermore, unlike many other real estate investments, it does not involve operating a property. Investors purchase shares in African property REITs, which own properties across the continent. These shares may be purchased through brokerage accounts that sell property investment trusts (PITs).

Risks of African property REITs

Like all investments, there are risks associated with investing in African property. These risks are more significant, given the concentrated nature of the investment opportunity and the limited availability of data.

The most significant risk is that the market for African property REITs may become overvalued. At the moment, there is huge excitement around the prospects of investing in African property, and this excitement may cause the market price to rise substantially. If the price rises too high, then the value of the investment could fall significantly.

There is also the risk that Africa will face political unrest or civil war, which could cause the value of African property to fall. Countries such as South Sudan, Sudan, and Zimbabwe have witnessed civil war in the past, and there is a real risk that these countries could experience civil unrest in the future.

Why you should still invest in African property

Despite the risks of African property, savvy investors should still consider putting their money into this sector because there are huge rewards to be reaped. With a huge number of investors keen to get their hands on some of the most attractive properties in the world, there is significant potential for investment returns.

Furthermore, African countries are expected to be some of the most exciting real estate markets in the world. Kenya, for example, is renowned for its safari properties, and investors are flocking to Tanzania to get their hands on properties close to game reserves. South Africa is experiencing a property boom, with wealthy foreign investors snapping up properties in cities such as Johannesburg and Cape Town.

African countries also provide some unique investment opportunities. For example, Egypt is emerging from years of political unrest, and government-owned property is a popular investment opportunity in this sector.

Summing up

African property is a highly attractive investment option, with attractive property markets and unique investment opportunities. This blog post has provided an overview of the risks and potential rewards of investing in African property. If you’re interested in getting involved, it’s a good idea to speak to a financial advisor first to ensure that this is a suitable investment for your circumstances.