How climate change threatens the future of African cities

Climate change is posing a significant threat to the future of African cities, according to Knight Frank's Africa Horizons Report for 2021-2022. The report highlights that African cities are experiencing rising temperatures and extreme weather changes, which will directly impact the urban environment and contribute to increased urban migration. The ability of African cities to recover from the pandemic and build resilience will hinge on their capacity to innovate, provide long-term social solutions, attract funding, and create new demand for urban spaces. Tilda Mwai, Researcher for Africa at Knight Frank, discussed these pressing issues with CNBC Africa from Dubai. Mwai emphasized the urgency of addressing climate change in African cities due to the projected increase in urban populations. Over the next few years, approximately 700 million more people are expected to move to African cities, requiring significant construction and industrial activities. However, the rapid pace of global warming poses a substantial challenge to the sustainable development of African cities. The report underscores the importance of environmental, social, and governance factors for property investors in Africa. These factors have gained prominence during the pandemic and are likely to remain critical in the coming years. Institutional investors prioritize these aspects for their brand values and sustainability goals, creating a premium for sustainable real estate projects. Innovation and economic growth are driving investment on the continent, with an increasing focus on certain sectors by governments. Mwai highlighted the need for the real estate sector to innovate and adapt to changing demands, particularly in commercial and residential spaces. Smart buildings and sustainable practices are expected to shape the future of real estate. Data centers are emerging as key growth areas in African real estate, driven by factors such as data localization requirements, underserved markets, and demographic shifts. African countries are increasingly demanding local hosting of data, leading to a surge in data center needs. Johannesburg and Cape Town in South Africa are leading data center markets on the continent. Regarding investment opportunities, Mwai identified alternative sectors like healthcare, logistics, agriculture, education, affordable housing, and student accommodation as promising areas. These sectors cater to social needs and present significant opportunities for investors looking to make a positive impact. In conclusion, the impact of climate change on African cities is a critical issue that requires urgent attention and innovative solutions. The real estate sector in Africa is undergoing transformation to meet the evolving needs of urban populations and address sustainability challenges. By capitalizing on emerging trends and opportunities, investors can contribute to the growth and resilience of African cities in the face of climate change.