Sub-saharan Africa to see $1.5b growth in hotel real estate sector in 2016

Global-hotelDespite this growth, local and regional brands will continue to play an important role as they that best understand local demand and real estate markets.
Global hotel real estate capital has been cautious in flowing into Africa due to perceived high risk and limited investment scale. Despite this cautious approach, hotel supply on the continent has grown by 4.1 per cent annually during the past 10 years, which has been driven primarily by local and regional developers.

This according to senior officials of Jones Lang LaSalle have made global investors to take note of the potential of the region and considering their optimal entry strategy into these markets.

In a research on Hotel Real Estate Sector in Africa, the firm predicts that Sub-Saharan Africa is seeing acceleration in hotel supply growth albeit off a lower base.

“We project supply growth of 3.0per cent in 2015, accelerating to 3.5per cent in 2016 and 4.0per cent in 2017. Lower resource prices are reducing the capital available for hotel investment and we assume that export earnings from resources will show some recovery in the medium term.

Our projected supply growth equates to an average of 9,000 additional rooms entering the market per annum at an investment of U$ 1.3 billion in 2015, rising to $ 1.5 billion in 2016 and $1.8 billion in 2017.

Global brands are increasingly penetrating the hotel sector in Africa and internationally branded supply is estimated at 22.0per cent of total rooms on the continent. Despite this growth, local and regional brands will continue to play an important role as they that best understand local demand and real estate markets.

In Nigeria, mini luxury hotels are growing and one of the most talked about new openings is Integrity Hotel and Suites in Victoria Island, Lagos. The proprietor, Dr. Lagun Adesanya told The Guardian that its 30 luxurious suites and rooms offer five-star facilities such as pool, patio bar and restaurant, which combines with the ambience to make the new hotel a perfect addition to the hospitality industry.



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