market view angola 2012_en

7/29/2019 Market View Angola 2012_EN

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PRINCIPAL ECONOMIC INDICATORS

Angola has emerged from more than four decades of war to become Africas second largest

oil exporter and its third largest economy.

Angola was vulnerable when the global financial crisis hit in 2009. Against the backdrop of

international reserves falling by one-third in the first half of 2009, the authorities sought

support from the IMF for their stabilization program.

Overall macroeconomic stability improved in 2011. Oil production problems constrained oilsector growth, but non-oil growth compensated for the decline, resulting in an overall real

growth rate of 3.9 percent. Headline inflation declined to 11.4 percent by year-end (13.5percent annual average), helped by a stable exchange rate.

The outlook for 2012 is relatively favourable, but affected by the recent decline in oil prices

and other uncertainties. The pace of economic activity is expected to accelerate with overallgrowth at 6.8 percent in real terms. Inflation is expected to continue to decline slowly, to 9.6

percent by end-2012 (10.8 percent annual average).

At the present time the supply ofoffice space in the city of Luanda is insufficient to meet

demand. Insofar as occupancy rates are concerned, in recently completed buildings, we

estimate that 90% of available space is already taken up. This fact has kept rental rates in

new buildings imbalanced compared to demand, from small and medium-sized companies,

for new quality office space in the centre of Luanda. As a consequence, while values

continue too high, the majority of these companies will continue to occupy precarious and

non-functioning space. In the Zone 1 of the city the sale prices of gross office space is on

average 8.500 USD/sq m. Rental values are between 120 and 180 USD/sq m. In Zone 2 of

the city sale prices of gross office area is on average 7.500 USD/sq m. Rental values are

between 100 and 120 USD/sq m.

As far as the residential market is concerned there is good demand for recently completedhomes, namely by companies which need a high number of units to house their staff. This

situation has created a good dynamic in the residential investment market, essentially

dominated by private investors. In the Zone 1 of the city sales prices of gross unit area is on

average 9.000 USD/sq m. Rental values are situated between 85 and 110 USD/sq m. In the

Zone 2 the sales prices of gross unit areas is on average 7.000 USD/sq m. Rental values

are situated between 70 and 85 USD/sq m.

The new supply of retail space in recent developments, varies between the typical shop

with street frontage to large developments of buildings with Retail galleries inside. Shops

with street frontage have shown a good demand, essentially from banking institutions,

insurance agencies or telecommunication companies. However, shops in retail galleries

inside the buildings are more difficult to sell or rent. Monthly rentals of street retail shopswhich have been restored vary between 50 and 80 USD/sq m. In new buildings monthly

rentals vary between 100 and 130 USD/sq m and sale values are situated between 6.000

and 9.000 USD/sq m.

Market View

LuandaOctober 2012

Trends

Prime Office

Hot Topics

Angola will show one of thehighest growth rates in the

world in 2012.

In the office market

demand exceeds the offer.

There is good demand in

the residential market,

specially from expats.

There is only one modern

Shopping Centre, Belas

Shopping, nevertheless, it

is projected the opening of

two more units within thenext two years.

Yields are quite attractive,around 16 to19% for the

office and Retail market

and between 12 to 17% for

the residential market.

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SUMMARY

Prime Residential

Prime Business

Source: IMF; World Bank; ZRE

Rental =

Sales

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2012, Zenki Real Estate, Inc.

DEFINITION OF THE ZONES

There are four distinct zones in Luanda, which

concentrate the greatest part of office space on supply:

Ingombotas District - Baixa (Zone 1): considered to be

the Central Business District (CBD), concentrates the

majority of prime buildings, occupied by the large

companies active in the country. In this zone are to befound also old office buildings occupied by foreign and

local mid-sized companies. A large part of government

companies and financial institutions are located in this

zone of the city.

Upper town (Zone 2): supply directed essentially at

small and medium-sized companies. For the most partoffice space available to and accessible by this segment

are integrated into mixed buildings of residential and use

by service companies or into residential buildings

transformed into offices.

Praia do Bispo (Zone 3): is the most recent business

zone of Luanda, and has grown for the centralisation ofsome administrative services of the state and office

buildings, recently completed and for the majority

occupied by companies linked to the financial sector and

petroleum industry.

Talatona (Zone 4): is also a zone of recent offices, which

in spite of being distant from the centre of the city, is analternative to the CBD due mostly to more accessible

rents.

OFFICES

Map of Luanda

Supply

In Luanda, excluding the few existing prime buildings, thesupply of the office market is characterized by residential

buildings adapted for offices and mixed buildings with

both residential and office space, in which the area

reserved for offices is reduced, normally to one or twofloors.

The supply available for quality office space is weak,

which is reflected in the rents charged which are amongst

the highest in the world.

Recently completed buildings have good quality with goodfinishings, however they have few parking spaces and the

area per floor is normally about 500 sq m.

The greater part of new supply and in the planning stage

is concentrated in the districts of Ingombotas and

Maianga.

DEMAND/ABSORBTION

In spite of high rents, the greater part of demand is for

renting rather than buying due to the fact that theinvestment for acquiring office space, in a new building is

quite high.

The greater part of demand comes from companies linked

to the Oil & Gas and financial sectors. More recently, the

Angolan State has acquired various office spaces for itsMinistries and administrative services.

There is still a growing demand from small and medium-

sized companies, however, prices are very high which

obliges this type of company to occupy office space which

is neither worthy nor functional.

According to our market analysis, we estimate that

occupancy rates for recently completed office buildings is

higher than 90%.

SALES AND RENTAL VALUES

There is currently a pressing demand for office space,which leads to a rapid occupation of recently finished

buildings.

This situation has contributed to rental and sale values

remaining high.

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MarketView

Luanda

Supply

The residential supply of the city of Luanda is

characterized by the co-existence of distinct realities:

Residential areas of poor and illegal construction, calledMusseques that dominate the citys landscape, mainly in

the centre which serve the classes of society with less

economic power. We highlight the Samizanga, Kalemba,Marcal, Bairro Popular, Cassequel, Mrtires, Terra Nova,

Cassenda, Prenda and Chicala.

Residential areas from colonial times, in the meantimerecuperated and in which are currently inhabited by the

classes of society with greater purchasing power and

diplomatic representatives, namely Miramar, Alvalade and

Bairro Azul.

Residential areas aimed at the medium class such as

Maculusso, Coqueiros, Vila Alice, Sagrada Famlia,

Maianga, Kinaxixi, Cruzeiro and Combatentes mainly

composed of buildings and houses that were occupied

after the independence and have not undergonerehabilitation works.

The new supply in the city of Luanda is essentially

characterized by housing located in mixed buildings of

offices and homes directed towards the mid-high andluxury segment.

DEMAND/ABSORPTION

The purchase of new and quality apartments, by theupper class, has been slowing down due to the small size

of this segment.

However, corporate demand, especially in the rental

market for medium-high product, remains very active.

This situation has created a good momentum in the

market for residential investment, mainly dominated by

private investors.

RENTAL AND SALES PRICES

The new supply prices applied in the city of Luanda aresummarized as follows:

Zone 1 Sale prices: 9.000 USD/sq m. Rental Values:

between 85 and 110 USD/sq m.

Zone 2 Sale prices: 7.000 USD/sq m. Rental Values:between 70 and 85 USD/sq m.

RESIDENTIAL

T1 T2 T3

New Used New Used New Used

Zone 1 9.000 2.000 12.500 3.500 15.000 6.500

Zone 2 8.000 1.500 10.500 2.500 13.500 4.500

Zone 4 3.500 2.500 6.000 3.500 8.000 5.500

Average Monthly Rental (USD)

Source: Zenki Real Estate

Edifcio Anfiris Lobito, Benguela

Retail

Supply

Retail in Luanda is characterized by the informal market,namely the direct sale on the street (zungueiros) and the

existence of various casual markets.

The recent supply of Retail space is restricted to the

ground-floor and galleries of the new buildings that arerising in the city.

The Angolan Retail is characterized by the presence of

local or of African origin operators, with little international

units. The few stores of leading international brands arescattered throughout the city, so there isnt a specific area

for Retail.

Belas Shopping situated in Talatona, approximately 20 km

from the centre, is the most modern and emblematic

shopping centre of Luanda. In the next few years, it is

expected to open new large Retail spaces in the centre ofthe capital, namely Luanda Shopping, located in the Gika

complex, and the Kinaxixi Shopping, located in the Torresof Kinaxixi.

Downtown Luanda, also has a shortage of Retail units, toassist the office spaces and residential areas, such as

restaurants, cafes, bookstores, stationery shops,

laundries, hairdressers and grocery stores/supermarkets

among others.

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2012 Z ki R l E t t I

DEMAND/ABSORPTION

The shops located on the ground floors of buildings facing the street have been occupied

mostly by banks, insurance and telecommunications agencies, which represent most of the

demand of this type of areas.

Most of the demand in the Angolan retail market is characterized by local or by African origin

operators, only a few are international operators.

With the opening of the new shopping centres it is expected the entry of several international

retailers, notably in the area of fashion, accessories and food & beverage.

SALES AND RENTAL PRICES

The monthly rents for remodelled shops vary between 50 and 80 USD/sq m.

In new buildings monthly rents range between 100 and 130 USD/sq m, and sales prices are

between 7.000 and 9.000 USD/sq m.

In recent years, the growth of the Angolan real estate market has been quite high, a result of

the economic growth and the political stability of the country.

However, the investment market remains in its very early stages, the result of still existing

errors, in the regulation of the rental market and in the ownership of property.

Yet, despite the transactions made in the investment market being predominantly

independent fractions, yields are very attractive, around 16-19% for the office and Retail

market, and between 12 and 17% for the residential market.

Retail (cont.)

Zenki Real Estate Endnotes

The figures presented were based on a study prepared by Zenki Real Estate. The study focused on pipeline key projects,

construction and completed in the city of Luanda, with special focus on the districts of Ingombotas and Maianga.

Information contained herein is taken by us as good. Although we do not doubt its accuracy we have not verified it therefore

we can supply no guarantees, warranty or representation of it. It is your responsibility to confirm its accuracy andcompleteness. Any projections, opinions, assumptions or estimates used are just an example and do not necessarily

represent the actual or future market performance. This information is intended solely for Zenki Real Estate customers, the

same can not be reproduced without the prior consent of Zenki Real Estate.

INVESTMENT

For more information, please

contact:

RESEARCH & CONSULTANCY

Email:

[email protected]

R. Comandante Stona, 278

Alvalade Luanda

ANGOLA

Tel: +244 934 838 383

ZENKI REAL ESTATE

VALUATION ADVISORY

Real Estate Valuations

Industrial ValuationsMortgage Credit

CONSULTANCY

Feasibility Studies

Market Research

Definition ofBest Use

AGENCY

CAPITAL MARKETS

DEVELOPMENT

www.zenkirealestate.com

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Due to growing demand for largecompanies in the Oil & Gas sector, the

residential market has been gaining a

strong position and has become very

attractive to private Angolan investors

and private funds.

Such companies supply guarantees that

compensate the regulatory errors of the

rental market in Angola.

Due to the risks still existing in thecountry, associated to the profile of the

Angolan investors, it is expected that the

market yields remain high in the comingyears.

Lubango centre Lubango, Hula
mailto:[email protected]:[email protected]

market view angola 2012_en

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