Precipitously, the horizon of the city of Accra is changing. The Capital is now West Africa’s hub of real estate construction activity.
Timeworn lorry parks are being neglected for modern office blocks. Tumbledown colonial government bungalows that served past dignitaries are being pulled down for world class residential estates. Estate developers are rushing to buy large tracts of land on the fringes of Accra at bargain prices to hold in their portfolios for future real estate development.
A drive from Accra Central on Independence Avenue all the way to Tetteh Quarshie will reveal huge billboards announcing all kinds of real estate projects currently under construction.
The beaches are also getting their share of the rush to build and sell property. Someone thought Labadi Beach could one day become something similar to the beaches of Palm Beach, Florida, Rio de Janeiro or Waikiki Hawaii and Viola! A new project is born by the name, La Beach Towers! The 18-story apartment complex is being built in three phases. Phase 1 alone has 66 units and beach lovers are falling over themselves to stake their turf.
Wonda World Estate has also secured a site along the beach for their beach front development project which they say will be one of its kind.
It is the area of Accra called Airport City that truly reflects the amount of investment dollars, from both local and foreign sources, pouring into real estate development activity in Accra. The speed at which construction projects are taking off in this part of Accra is remarkable.
Marina Mall, a shopping mall and office complex owned by the Marina Group of Burkina Faso, was completed barely two and a half years ago. Not long after, came South Africa’s RMB Westport who, a year ago, completed their flagship mixed-use property named Icon House in the same Airport City, already taken by Stanbic Bank as anchor tenant.
Next door is Nester Square, another mixed-use office tower and retail development, being built for Ernest Chemists by the construction firm, DeSimone Ltd. A walking distance away is Atlantic Tower, a 13-story modern architectural office edifice, almost completed on a 2 acre land by the Meridian Group.
The African Sun Hotel, in this same enclave, was built by Trassaco. Other name brand international hotels are gunning for space in this same area because of its proximity to the Kotoka International Airport.
In the Oxford Street area of OSU on Kuku Hill, a 1.2-acre land has being turned into a 120-unit apartment complex called Chateau Towers. The project is being developed by Hollywood International Developers; their very first project in Ghana. Preceding this development, GLAHCO had just completed a beautiful 13-story shopping mall and hotel complex on Oxford Street called The Oxford Street Mall a year ago, whose anchor tenant is Shoprite, a supermarket brand from South Africa.
Another addition is the No. 1 Oxford Street, a high end luxury residential, commercial and recreational development property which is been constructed by a Wonda World Estates.
Not to be surpassed, the central business district of Accra itself is hosting quite a bit of construction activity. The sprawling 13-story Octagon Business Center in the heart of Accra is almost complete. Dubbed as one of the most expansive and opulent business centers in West Africa, this ambitious project by Dream Realty is a mixed-use property consisting of luxury office suites, hotel suites and retail space, all providing leisure, food, business and hospitality.
The Center consists of a 200 hotel room block, 13 floors of office space, five floors of parking space, a food court, five cinema theaters, world-famous branded shops and supermarkets, and space for clinics, banks and world-class tenants. Next door at the then Accra Race Course, Kempinski Hotel Gold Coast City is the all new five-star 269-room hotel to compete with the Moevenpic Ambassador and Novotel (now Accra City Hotel) in the vicinity.
The banking industry will not be left out of the fray either. ADB put up its new corporate headquarters (Accra Financial Centre) next door to the Moevenpic Ambassador, while Societe-General has moved into its brand new headquarters along the Ring Road, a walking distance from the famous Busy-Internet.
Other banking structures are coming up and it is definitely a sign of the positive economic trends in our country today. The very first office park project in Ghana, Capital Place, is currently being built by Mobus Property Development in the Airport Residential Area. The office park is a cluster of buildings containing multiple offices offering various professional services in a commercial park setting.
It is in the Cantonments, Airport Residential and Ridge areas that the fiercest competition for high-end residential real estate development is currently taking place. Being the most desirable parts of Accra, particularly where foreigners prefer to live; apartments, condominiums and town-home projects are fiercely shaping up. The rush to build in these areas is not surprising, considering the high rents properties command here.
Expect to buy a 3- to 4-bedroom apartment in these areas from $450,000 to $600,000, and rent them for $3500 to $4500 unfurnished. A one-acre land in these areas costs between $2.5 and $3 million and a developer could only build apartments or condos sky-high to make a profit.
Meridian Apartments II, Kwarleyz, Sloan House and Villaggio Vista are all projects completed at the Airport Residential area, while the Switchback Park Project, Aurora Apartments, Goldkey Properties and Devtraco are building residential properties in the Cantonments and Ridge areas. It may surprise many people to know that it is possible to find a $2 million penthouse apartment to buy in today’s Ghana. Visit the Villaggio Vista and La Beach Towers to find out.
It is obvious that the demand for office, hotel and retail space is extremely high in our country today, just as demand for high-end residential real estate continues to be brisk. Accra Mall, A&C Mall, Marina Mall, Oxford Street Mall and the all new Achimota Retail Centre are not enough to satisfy the growing demand for retail space in a city with a population of 5 million.
One sector literally begging for investors to come and explore but which has been largely ignored is the warehousing industry needed to store imports and exports as a result of the expansion of our ports and harbors.
Another overlooked sector is low-end real estate. Even though demand for middle-income and low-end residential real estate is extraordinarily high, supply in this sector is extraordinarily short because of the lack of construction financing and the high costs of building materials.
Property developers in this sector have to settle for the practice called “build-on-request”, in which houses are only built when a request is made by a potential buyer; the buyer pays for the house in installments as construction progresses. So the industry practice here is for builders to go and buy large tracts of land, subdivide and sell as serviced plots, from which they derive income to start the build-on-request process.
Apart from Regimanuel Gray Ltd, RSS Developers, Devtraco and a handful of others, several members of the Ghana Real Estate Developers Association (GREDA) can only survive in business mainly through building on request, due to the reluctance of local banks to grant them construction loans. This lack of construction financing has created such a huge gap between demand and supply in the middle-income and low-end residential real estate sector. Consequently, it is in this area that some creativity is most needed.
The government has arms wide open to welcome foreign investors into the housing sector. The huge concessions granted by government to the South Korean investor STX to build 200,000 houses, before the project collapsed under boardroom wrangling, is ample evidence of the open-door policy of government to attract foreign participation in this sector. This policy is given an acronym PPP (Public Private Partnership) and foreign companies like Brazilian Construtora OAS, Nairobi based Shelter Afrique and the Addoha Construction Company of Morocco are already taking advantage of this huge opportunity.
This story is concentrated on real estate activity in Accra, our capital city, to reveal what the rest of the country desperately needs today in the real estate industry.
These needs can be replicated in Takoradi, our oil city, Kumasi, our garden city, Sunyani, Tamale, Ho, Cape Coast, etc. With a vibrant economy, a rising populace, a sophisticated and well-read professional class, demand for all kinds of real estate development hugely outstrips supply.
“It is a sector desperately waiting to be explored, and the Ghana Investment Promotion Center (GIPC) is doing everything humanly possible to attract foreign investment into this sector” said Mrs. Mawuena Trebarh, CEO of GIPC.
“If you are an investor with a shopping list of emerging countries to plough your investment dollars, Ghana should be on the top of that list” said Dominic Akwetey Monney, Managing Director of Newmoncreek Properties Limited.
For a country widely acknowledged to have moved from low-income to lower middle-income grade (according to World Bank classifications), with a reputation for economic and political stability, Ghana is gradually becoming the go-to investment destination and a springboard for investors from all over the world, seeking a safe haven to put their investment dollars on the African continent.
If this trend continues, the confidence, peace and tranquility our country has chalked over the years should bring in more investment dollars, some of which should trickle into the real estate sector. I can safely bet on this one because this trend has happened in so many other countries all over the world, the US being a classic example. Can the investor community stay away from a country like Ghana with a housing deficit of 1.7 million housing units?