Guest editorial

Citation

Olawore, A. (2011), "Guest editorial", Property Management, Vol. 29 No. 3. https://doi.org/10.1108/pm.2011.11329caa.001

Guest editorial

Article Type: Guest editorial From: Property Management, Volume 29, Issue 3

The African Real Estate Society (AFRES), a continent-wide academic and professional networking society and member of the International Real Estate Society was founded in 1987.

One of the cardinal objectives is to provide a platform for African real estate researchers to publish their works for the benefit of the global real estate academic and professional community.

It is gratifying to note that our partnership with Emerald Group Publishing Ltd has blossomed and culminated in the publication of this special issue dedicated to African authors.

African property market has tremendous growth capacity and continues to woo investors. The current housing deficit in sub Saharan African is about 40 million with Nigeria alone accounting for about 16 million, according to World Bank Statistic. This calls for about $1.4 trillion at an average of $35,000 per unit for affordable housing.

Given the huge deficit, it is imperative that the existing stock is properly and efficiently managed to provide opportunities to the stakeholders and entire economy as both physical and financial assets. The maintenance of the physical assets also poses some challenges and the more sophisticated the design and construction material, the greater the challenges especially in terms of technology.

The maintenance of the physical assets also poses some challenges and the more sophisticated the design and construction material, the greater the challenge especially in term of technology.

With the prospect of a huge and growing deficit, foreign investors who intend to take advantage find it difficult to enter the market, largely because of the lack of empirical information and clarity about business environments in the various countries.

The above challenges provide research opportunities for scholars in areas of preservation and upgrading of existing stock, management of the existing stock, provision of affordable housing, construction technologies and methods, building materials, development financing, land fitting and registration, mapping empirical study of value movement and the drivers etc

The research materials published in this issue show some of the issues bedevilling the real estate sector as a whole in parts of Africa and there is room for more in depth research in various areas as highlighted above and more to provide the needed information not only to increase body of knowledge, but also as a guide to investors.

The housing deficit is found to exist more in the middle class bracket, a class that continues to grow in number and sophistication across the continent, with an average literacy level of over 55 per cent (2003 est) and growing with an average population growth of 2.8-3.0 and gross domestic product (GDP) of 5.1 per cent. The demographic structure of most countries in Africa has a median within the middle class, further making the issue of housing a top priority for socio-economic stability.

The main bane of housing development in Africa includes:

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  High cost of building materials.

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  Lack of viable and deep secondary mortgage systems

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  High cost of finance due to virtual absence of capital and equities market involvement in financing real estate development.

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  Unfavourable fiscal policies on housing in most of the countries.

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  Befuddled land titling and registration procedures.

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  High cost of title perfection.

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  Tedious and frustrating foreclosure procedures.

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  Inadequate mapping of the land mass in the continent.

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  Lack of effective demand due to lack of access to affordable finance by the teeming market.

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  Treacherous access to land.

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  Undeveloped local building materials.

Local developers lack the technical and financial capacity to meet these daunting needs, hence there is a need to open up the market to foreign investors through structured and transparent research analysis, for informed decision making.

The AFRES, in order to help create a radar for the African property market has embarked on property research of value indices, value movements, value drivers, amongst others, in major cities in Africa, using networks of local researchers.

Similarly, a country-by-country study of doing business guide is underway with a view to creating a benchmarking spreadsheet for the various countries of Africa. We intend to work with the relevant organ of the African Union to encourage the respective countries to adopt global best practices in land and property market reform as appropriate from the Researches findings we believe this will promote comparative standards such that Africa as a whole will be demystified from investors.

The African economies are emerging and growing with over 90 per cent of global urbanization in the developing world.

With a population of 819.3 million, GDP per capita of $624 and 5.1 per cent average GDP growth:

African governments must walk the talk of reform (Obiageli Ezekwesil, Vice President World Bank).

Africa is where global growth will be coming from over the next two decades or more.

The AFRES partnership with Emerald provides a publishing opportunity for African real estate researchers and a must read for not only the global real estates academic community, but also discerning international investors with an eye on the African market.

I believe this publication will provide an incentive for African researchers to do more and publish more for the global community.

Akin Olawore