Ghana tops West Africa real estate investment attractiveness index as Nigeria ranks third

Ghana ranks first among 16 West African countries on real estate investment attractiveness, followed closely by Cote d'Ivoire and then Nigeria, according to a new report launched at the weekend by Panterra Real Estate Group.

The report, titled 'West Africa Real Estate Investment Attractiveness', draws on 'The Attractiveness of 66 Countries for Institutional Real Estate Investments' by Karsten Lieser and Alexander Peter Groh. Ayo Ibaru, Panterra's chief investment officer, said the ranking of the West African countries took into consideration each country's GDP size, GDP per capita, GDP growth, workforce, inflation and innovation.

The report pointed to Ghana's rental yields and returns as key attractions. It said turnkey residential properties average 8 percent to 10 percent yield across Ghana, while a major developer such as Devtraco Group projects a conservative average return on investment of about 12 percent, denominated in US dollars rather than cedis. Ewurabena Braye, Devtraco's head of sales, said Ghana maintains an efficient commercial legal system, with commercial disputes typically resolved within three months and alternative dispute resolution or arbitration taking two weeks to a month.

On real estate investment opportunities in the sub-region, Nigeria topped the list, followed by Ghana. That ranking was based on institutional property estimation, degree of urbanisation, urban population and growth, quality of infrastructure and development of the services sector. The report noted that Nigeria's homeownership level is estimated at about 25 percent of a population of more than 200 million, with a housing deficit in excess of 20 million units, while more than 70 percent of the population lives in rented accommodation and spends over 50 percent of annual income on rent. It cited estimates that the country needs to build close to 300,000 housing units a year to close the gap.

Panterra chief executive Tayo Odunsi said real estate in Nigeria remains an opaque sector with no standard repository for information. He said Northcourt Real Estate was founded 14 years ago to address transparency issues in West African real estate, and Build Africa Technology Company three years ago to tackle transparency in Africa's construction sector, with the two merged about nine months ago into Panterra Real Estate Group. The group launched two reports and a new investment product called Panterrium at the event.