REAL ESTATE
ANALYSIS
A Bright Outlook Demand Driven by Housing Deficit and Increased Industrial Activity Confidence in the Zambian real estate industry is high and is underpinned by healthy economic growth, political stability and a growing population. Supply is increasing across all sectors: residential, office, retail, industrial and hospitality. Prices have continued to rise fuelled by the growing middle-class, strong residential and retail demand, improved macro-economic conditions and the stability of the local currency. There were numerous notable real estate transactions in 2015 and 2016 with companies such as Mara Delta, SA Corporate, Quantum Global, African Life, FQML and Primetime growing their portfolios. Substantial growth in real estate investment has been generated by both local and regional investors. RESIDENTIAL: Market activity has slowed across all sections of the residential market, but there remains a mismatch between demand and supply at the top end of the Lusaka rental market due to a shortage of well-designed modern properties in the best locations. Self-build projects dominate the housing supply across the market, because of the high interest rates. Zambia is struggling with a 1.5 million housing deficit, which is expected to rise to 3.3 million units by 2030. The country’s current housing stock is 2.5 million units at a production rate of 73,000 units per year. In order to address the current housing deficit, 222,000 new housing units need to be developed annually. The housing challenge in Zambia is most pronounced among low-income groups. Of the 73,000 units produced each year, only 40% meet the minimum requirements for health and sanitation in accordance with the Zambian Public Health Act,” local press quoted Minister of Transport, Infrastructure Housing and Urban Development, Ronald Chitotela.
Several upmarket projects have been launched in 2017 as part of private investors’ commitment to address the shortage of high-end residential properties. The Egyptian investor Hawai Real Estate and Zambia’s Lamasat have joined forces in a $40m project dubbed Elites to construct housing units in two of Lusaka’s affluent suburbs. One: 100 units in Lilayi and 50 in Leopards Hill. Increased infrastructure development, over the last few years, has created access to new suburban areas. The land on which Nkwashi, a new satellite town is being constructed could only be accessed via a dirt road, and two-hour drive from Lusaka. It was originally a ranch and small-scale coffee farm, but about five years ago the road to Nkwashi was developed into a highway that reduced travel time from Lusaka to 30 minutes and opened up the land’s potential. Nkwashi is the first of its kind and one of the largest developments in Africa. The development includes provisions for a university, schools, hospital, public parks, lakes, shopping mall, recreational areas, business park and 9,460 residential stands ( a third of which have already been sold). A public–private partnership between Zambia Air Force and Sun Share Group has recently resulted in a $1.4m mixed-development project that will comprise a five-star hotel, 3,000 high-class villas and shopping mall. Other amenities will include a private school, police station, hospital, children’s play-ground, amongst others. “The housing deficit presents an opportunity for investment and I call upon local and foreign investors to exploit this opportunity by developing low, medium and high-cost houses” said Patrick Chisanga, the former Director General of Zambia, Development Agency. “The Government of the Republic of Zambia through Statutory Instrument No. 17 of the ZDA Act, has prioritized housing unit development in the Economic Zones
“Zambia is struggling with a 1.5 million housing deficit which is expected to rise to 3.3 million units by 2030.”
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