Property asset classes poised to bounce back in 2024

Global investors are increasingly turning their attention to property assets in Africa as demand continues to rise across the continent. In a recent interview with CNBC Africa, Bronwyn Knight, Chief Executive Officer of Grit, discussed key trends in the real estate market. Knight emphasized the growing need for infrastructure and real estate in Africa, highlighting asset classes such as commercial, industrial, warehousing, offices, data centers, and call centers. Despite the abundant opportunities in the African market, Knight acknowledged the challenges posed by the high cost of money for emerging markets. She stressed the importance of assessing opportunities based on the cost of capital. Knight specifically pointed out the immense investment potential in countries like Kenya and the East African region, citing Grit's significant investments in Kenya. The conversation shifted to the topic of special economic zones (SEZs) in East Africa, with Knight expressing excitement about the niche market. She shared Grit's success story in Kenya, where the company has invested approximately $300 million in commercial real estate. Knight highlighted a recent project in Tatu, a SEZ zone near Nairobi, as a testament to the benefits of partnering with global tenants and infrastructure developers. The project not only showcases the ease of doing business in an SEZ but also the positive impact on foreign direct investment (FDI) in Kenya. As the interview delved into the risks and challenges in the underdeveloped market, Knight underscored the importance of government support and regulatory cooperation. Despite facing currency devaluation, inflation, and other economic hurdles, Knight praised the Kenyan government for its commitment to attracting investment. She attributed the success of Grit's investments to the collaborative efforts of government agencies and regulators, emphasizing the creation of 5,000 new jobs in Kenya through the infrastructure project. Knight acknowledged the difficulties of navigating the current economic climate but remained optimistic about the opportunities in the real estate sector. The conversation concluded with a focus on innovation and sustainability in construction. Knight emphasized Grit's dedication to environmental, social, and governance (ESG) principles, highlighting the company's innovative approaches to delivering sustainable projects. She shared the impact of the Tatu project, including the creation of 1,300 jobs during construction and the empowerment of women in the industry. By prioritizing building efficiencies and impact sourcing, Grit aims to set a global benchmark for ESG-focused real estate development. Knight's closing remarks highlighted the importance of sustainability, both in building design and in creating opportunities for local communities. In conclusion, Knight's insights shed light on the growing interest in African property assets and the potential for sustainable real estate development in the region. Despite challenges, the real estate market in Africa presents significant opportunities for investors willing to navigate the complexities of the market and collaborate with governments to drive economic growth and job creation.