Performance of East Africa’s warehousing and logistics market

East Africa's warehousing and logistics market is experiencing high demand for Grade A International Standard Logistics and Distribution Centers, according to Toby Selman, CEO of Africa Logistics Properties. In a recent interview with CNBC Africa, Selman discussed the success of their flagship project in Nairobi North, which achieved an impressive 75% pre-leasing rate. This project marks the first of its kind in Nairobi, offering a solution to the poor quality warehouses that have been prevalent in the market. Selman attributes the high demand for their product to its innovative design and modern facilities, meeting a specific need that was previously unaddressed. Despite challenges faced by the retail and office sectors in East Africa due to recent elections and economic disruptions, the logistics sector is thriving with an increase in investor interest. Selman emphasizes the strategic importance of East Africa as an attractive region for investors, especially amidst economic challenges faced by other African countries. The region's strong economic fundamentals, consumer improvements, and ease of doing business have made it a prime destination for commercial and residential real estate investors. Selman notes that Kenya, in particular, has seen a drop in commercial and retail yields from 11% to 8% in 2017, indicating a strong demand for quality assets. With a lack of Grade A warehousing facilities available in the market, Selman highlights the investor interest in their modern facilities, offering competitive yields and appealing tenant covenants. Overall, East Africa's warehousing and logistics market is witnessing a surge in demand for Grade A facilities, with investors showing a keen interest in well-located properties with modern amenities. Despite challenges faced by other sectors, the logistics industry remains a bright spot in the region's real estate landscape, attracting both local and international investors seeking lucrative opportunities.