Knight Frank has released the Africa Residential and Office Dashboards to provide real estate stakeholders with regular analysis of rental performance in markets across Africa. The H2 2020 dashboards examined the residential and office market performance in 26 African cities during the second half of 2020.
The Africa Residential Dashboard indicated a 19% decline on average sales in the year to December 2020, due to the economic downturn caused by the COVID-19 pandemic.
Dar es Salaam, Tanzania and Tunis, Tunisia recorded among the highest decline in prime residential rents by 33% and 34% on average in 2020 compared to the previous year. This decline was attributed to reduction in household disposable income as a result of the COVID-19 pandemic.
In Nairobi, prime residential sale prices decreased by 3.9% in 2020, compared to 4% in 2019. In Johannesburg and Cape Town, South Africa, there was a marked improvement in prime rents in H2 2020 compared to H1 2020 as a result of the South African Rand appreciating against the US dollar.
Tilda Mwai, Knight Frank Researcher for Africa said, “Despite an overall slowdown in market activity due to the lockdowns imposed throughout the year, we have witnessed a gradual rebound in prime residential sales in majority of the markets and this is expected to continue into 2021.”
The dashboard also unveiled a potential rise in demand for quality living spaces in Kampala Uganda, because of remote working and the impact of the pandemic. Further in Nigeria, affordable housing demand is expected to persist and as a result increased government intervention have been observed in Lagos.
In the Africa Offices Dashboard, prime office rents declined by 11% on average in the year to December 2020 across the cities tracked by Knight Frank.
Occupancy rates in cities such as Nairobi were recorded at 72% on average. Kampala recorded an increase in vacancy levels to 23% from 17% a year earlier during the period under review.
Majority of the markets showed occupancy in the period under review characterized by office relocations and demand for smaller office spaces.
Tilda further explained that in general, Africa’s office market will remain plateaued in 2021. Early signs of recovery are only expected in the last quarter of the year.