zreport - Luanda - Zenki Real Estate

ZREPORT
Angola Property Market 2013
ZREPORT
Angola Property Market
www.zenkirealestate.com
August 2013
INDEX
3
ABOUT US
4SUMMARY
6
MACROECONOMIC CONTEXT
7POPULATION
8
LEGAL AND FISCAL CONTEXT
9
OFFICE MARKET
13 RESIDENTIAL MARKET
17 RETAIL MARKET
18 INDUSTRIAL AND LOGISTICS MARKET
19 TOURISM MARKET
21 INVESTMENT MARKET
ZREPORT
Angola Property Market
About us
Zenki Real Estate is an Angolan company working in the Real Estate Market since 2009 as part of
the CBRE affiliate network, a global leader in real estate services, with more than two centuries of
international experience, 34.000 employees and 447 offices in 60 countries.
Zenki Real Estate operates representing clients in selling, leasing, valuation services, consultancy and
research.
We provide services to all real estate stakeholders, public or private, tenants, users, developers,
lenders or investors.
We develop business in office buildings, industrial property, retail, hotels and residential, in its different
phases from land, assets to occupy or with income.
We treat all the information in a transparent and professional manner and publish every year market
reports, which highlight major indicators and trends of the real estate market.
It is with great pleasure that we present you our latest real estate property market report, which
expresses our vision and market trends.
August, 2013
Diogo Osório Rodrigues
Managing Director
3
ZREPORT
Angola Property Market
Office take-up
200.000 sq m (in 2012)
4
Office stock
+61% (2012-2014)
Residential real pipeline (until 2014)
+2.950 units in Luanda and Talatona
Hotel occupancy rates
75% (average)
SUMMARY
Trends
Macroeconomic indicators
GDP
Inflation
G
H
Office space
Take-up
New Supply
Sale
& lease values
I
K
I
Residential
Take up
New Supply
Sale
& lease values
I
K
I
Retail
Take up
New Supply
Sale
& lease values
K
K
I
Industrial and Logistics
Take up
New Supply
Sale
& lease values
K
K
I
Tourism
New Supply
Occupancy Rate
Average
Room Rate
G
H
H
Investment
Investment
Turnover
K
Prime yeld
H
The impact of the global financial crisis was felt on the Angolan economy by a
slowing of the growth rate of its real estate sector. However, the country in general,
and the province of Luanda in particular, is now experiencing a new period of
growth with the office and residential sectors being the most active. This is being
assisted by higher build quality and finishes, which are having a positive effect on
Prime market rates, even when compared to 2012 values.
The demand for modern quality offices continues to come mainly from companies
in the oil & gas and financial sectors as the rental prices are still too steep for the
majority of small and medium sized companies.
In the residential sector the main demand stems from the Angolan mid to upper
classes, as well as from large international companies looking for housing for their
top level employees, working and living in Angola.
With the emergence of an Angolan middle class, new lower cost construction is
now emerging outside of the main city centre and Talatona. However, the almost
non-existence of mortgage loans has had a detrimental effect on the growth of
this market sector.
The retail sector is currently very immature but is making its first steps and shows
great growth potential in both supply and demand, again due primarily to the
emergence of the middle classes. There are currently only three modern shopping
centers in the Luanda province but six others are under construction. Over the past
year, the country’s first two retail parks were completed. The main retailers that
are looking to expand into Angola are from the distribution and wholesale food
industry, while the high-end and luxury brand markets are still poorly represented.
With the opening of new shopping centers and retail parks, the arrival of more
international retailers is expected.
The industrial property sector is being represented as one of the Angolan
Government’s main targets for stimulating the economy. The majority of the
existing industrial and logistics ventures were build-to-suit. However, more recent
warehouse and industrial complexes have started to emerge which are being
developed by private companies.
Following a period of national reconstruction, Angola has began to invest in its
potential for tourism through the implementation of the Master Plan – PARTENON
–that defined the Strategy for the Development of Tourism in Angola up to 2020.
Studies are being carried out to define the priority Tourism Development Centers,
selected for their potential to provide short term tourist income. These include the
Cabo Ledo (Center), the Kalandula Center and the Okavango’s Basin Center.
ZREPORT
Angola Property Market
5
Luanda Province continues to stand out as the principal location for hotel supply, generating approximately 80% of
the sector’s total revenue, followed by the provinces of Huíla and Benguela.
There are 16 mid and high quality hotels (3, 4 and 5 stars) in the center of Luanda offering in all approximately 2,000
rooms. The annual average occupancy rate is currently 75% and the average room rate is $375 USD/night (with
breakfast and taxes included). Several hotel developments are underway in Luanda, which will go some way to
balance the supply in the sector. It is estimated that the total number of rooms will increase by 66% by the end of
2015.
The investment market in Angola is still in its infancy. The evolution of the market is being held back by the pending
publication of legislation that will aim to regulate real estate investment funds. This regulation is hoping to drive
an improvement in the maturity of the real estate market, not only with an increase in the number of transactions
carried out, but also with an injection of foreign capital. Currently yields are running at between 12% and 18%,
however, with the prospects of sustained economic growth over the coming years and a reduction in inflation, the
tendency will be for a decrease in the perceived country-risk and an accompanying decrease in yields.
Luanda Central Business District
ZREPORT
Angola Property Market
6
MACROECONOMIC CONTEXT
Angola is one of the main economies of Sub-Saharan Africa. It is a country that reported the best performance
over the period of 2000-2009, with growth rates above 10%.
In 2009, when the global economic crisis reached Angola, the economy became vulnerable. In order to defend
itself against the reduction of a third of the international reserves in the first quarter of 2009, the Angolan government
approached the IMF for a stabilization program. The IMF’s program for the period 2009-12 contributed towards
regulating fiscal policies and restricting the level of debt, and assisted in bringing about improvements in the
management of the public sector.
In 2012 the economy registered an increased growth of 8.4% of GDP, driven principally by the recovery in the oil
sector as well as the continuation of notable growth in the non-oil sectors. The IMF’s presence also contributed
towards the reduction in inflation to single digits (between August and December 2012) for the first time in 10
years, resulting in an average annual inflation rate over the period of 10.3%.
The macroeconomic perspectives for 2013 are favorable, despite a still uncertain global setting. Forecasts point
to a sustained increase in oil prices as well as growth in the non-oil sectors, boosted by an intensification of the
public investment program aimed towards the conclusion of reconstruction projects and the improvement of
basic infrastructure. It is estimated that, in 2013, economic activity will continue to flourish, with a growth rate of
6.2% of GDP, and that inflation will continue to gradually fall to 9%. According to recent forecasts presented by the
Ministry for Economy, Angola will have an average growth of 7.1% of GDP over the next 5 years.
GRAPH 1: MAIN ECONOMIC INDICATORS
16.0%
7,000 USD
14.0%
6,000 USD
12.0%
5,000 USD
10.0%
4,000 USD
8.0%
3,000 USD
6.0%
2,000 USD
4.0%
1,000 USD
2.0%
0.0%
2008
2009
2010
2011
2012
2013 (e)
2014 (e)
GDP per capita (USD)
4,596 USD
3,989 USD
4,219 USD
5,159 USD
5,485 USD
6,033 USD
6,292 USD
Growth of the GDP (%)
13.8%
2.4%
3.4%
3.9%
8.4%
6.2%
7.3%
Inflation Rate (CPI,%)
12.5%
13.7%
14.5%
13.5%
10.3%
9.4%
8.4%
(e) Estimated values
Source: IMF, World Bank
0 USD
ZREPORT
Angola Property Market
7
Chicala, Luanda
POPULATION
Angola does not hold robust demographic data. A Census of Population and Housing is programmed for
2014 and will look to characterize the population and housing in Angola in order to produce accurate geographic,
economic and social statistics that are fundamental to the process of planning for future development.
The United Nations’ report on the Human Development Index shows that Angola had a population of 19 million in
2010 and a national growth rate of 25%.
The forecast is that the country’s population will be over 30 million by the mid 2030’s. It is also estimated that by
2050, the average life expectancy will rise to 63 for men and to 67 for women.
Due to a rise in migration from the country’s interior to the cities, and particularly to Luanda, there is now a huge
concentration of people in the capital, which houses nearly 30% of Angola’s total population (with approximately
6 million inhabitants) and this trend is expected to continue.
GRAPH 2: ANGOLAN POPULATION
(Million Inhabitants)
30
27.7
24.8
25
21.8
20
19.0
Angola
16.4
Luanda
15
10
11.3
9.0
7.2
5
5.4
4.1
0
2005
2010
2015
Source: INE (National Statistics Institute); UNITED NATIONS
2020
2025
ZREPORT
Angola Property Market
8
LEGAL AND FISCAL CONTEXT
The Legal Framework of Collective Investment Undertakings
In collaboration with FCB&A/ EVC Lawyers.
The approval of an Angolan legal framework for real estate funds (in Portuguese, Regime Jurídico Angolano dos
Fundos de Investimento Imobiliário,“RJFII”) has been awaited for some time, as a means to address the inadequacy
of the system regulated by law no. 12/05 of the 23 September, that only regulated actions and operations that
referred to securities.
In order to address this issue, a preliminary Presidential legislative decree was disclosed in 2012, intended to approve
the new Angolan legal framework for real estate funds, the RJFII, as law dedicated specifically to Real Estate
Investment Funds. However, on the 24 April 2013, a new project for a Presidential legislative decree was submitted to
the Council of Ministers, called the Legal Framework of Collective Investment Undertakings (in Portuguese, Regime
Jurídico dos Organismos de Investimento Colectivo, “RJOIC”), which will incorporate under a single diploma, not
only the Angolan legal framework for real estate funds (RJFII), but also the legal framework for real estate investment
funds and the management of collective investment undertakings (“OIC”). In this way it aims to address the need for
a harmonisation of the Angolan legal framework relating to capital markets.
Regarding the real estate collective investment undertakings (OIC), in general terms there is a similarity between the
RJOIC and the Portuguese RJFII, approved by decree-law no. 13/2005, 7 January. In this manner the RJOIC defines
the assets that fall under the concept of real estate collective investment undertakings; it establishes the remits and
obligations of the managing and trustee body and of the participants; and stresses the importance of transparency
and the need for public information in fund management. The Capital Market Commission (Comissão do Mercado de
Capitais or CMC) is now established as a regulatory body and is charged with authorizing the creation and operation
of the OIC, namely in what relates to the merger, division, transformation, as well as the dissolution, liquidation, sharing
and winding-up of funds. The RJOIC introduces, however, a new concept that relates to the possibility of creating
groups of OIC managed by the same entity, with the aim of facilitating share transactions.
As for the legal nature of the funds, the diploma stipulates that funds must take the form of unincorporated assets
or, alternatively, the form of corporations. Autonomous investment funds held by the respective participants under a
regime of ownership, with corresponding rights and obligations are qualified as unincorporated assets. Alternatively,
the funds could assume a corporation form by creating investment corporations (“SI”) which will have to obey the
laws that apply to their operations, instituted by the RJOIC and by Law no. 1/04 of the 13 February.
Similarly to Portuguese law, the funds can be open-ended, closed-ended or mixed, depending on the shares being
issued without restriction, in fixed number or both. These funds are managed by management corporations that are
obliged to follow guidelines in what respects to transparency, publicizing information, composition of assets and
limitation of certain operations. For this particular case, the financial instruments that integrate the fund’s assets should
be entrusted to a single trustee that must be a bank with headquarters in Angola and whose activity is regulated.
Table 1: Summary of Property Rate
Tax
Administrative Fee
Leased Property
15% of the rental value (to be borne by the property owner/landlord, either directly or
by withholding the tax paid by the tenant should he have an organized accounting)
Property that is not leased
0.5% of the excess of 5.000.000 AKZ of the property’s equity value (to be paid
by the owner)
Property Tax (IPU)
2% of the acquisition value or of the property’s equity value, if this is greater (to
be paid by the owner)
Property Tax (SISA)
Sale/ Purchase contracts
0.3% of the acquisition value or of the property’s equity value, if this is greater
(to be paid by the owner)
Financing contracts
0,1% of the credit value in the case of house loans
Between 0.5% and 0.1% of the value of the contracted credit (to be borne by
the credit user and paid by the credit provider)
Stamp Duty
Note: does not replace consultation of the relevant legislation
ZREPORT
Angola Property Market
9
OFFICE MARKET
The office space market in Angola is still mainly concentrated in Luanda. In the other provinces this market sector is
still in its early stages of development and the majority of transactions are carried-out in an informal manner. In the
cities of Benguela, Cabinda, Huambo, Lobito, Lubango and Soyo, offices are mainly located in adapted houses/
apartments, shopping centers or other mixed use commercial venues. In general these properties are not wholly
suitable for modern office use.
OFFICE ZONES IN LUANDA
Zenki Real Estate divides the office locations in Luanda into four distinct areas:
• Downtown: considered the Central Business District (CBD), it has the greatest concentration of prime real estate,
occupied by the largest companies operating in the country. The ‘CBD’ also has older office buildings, occupied
by national companies as well as mid-sized foreign companies. The majority of the government departments and
financial institutions are also located in this area of the city.
• Uptown: office buildings catering mostly to small and medium enterprises. Most of the office space available is
integrated in buildings that house both residential apartments and service companies or in residential buildings
that have been converted into offices.
• Praia do Bispo: Luanda’s business area that arose from the centralization of some of the state’s administrative
services. Due to its proximity to the CBD, the office buildings here are mainly occupied by companies in the
finance and oil sectors.
• Talatona: a substitute to the city of Luanda that, despite its distance to the city’s center, is considered an alternative
to the CBD for large companies.
3
1
4
Source: Zenki Real Estate/Google Earth
2
1 Downtown - CBD
2 Uptown
3 Praia do Bispo
4 Talatona
ZREPORT
Angola Property Market
10
OFFICE SUPPLY
In Luanda the available office space is mostly old
residential buildings that have been converted into
offices; buildings constructed in the post-civil war
period composed of both residential apartments
and office space; and a small number of buildings
that are exclusively offices.
GRAPH 3: DISTRIBUITION OF OFFICE
STOCK BY LOCATION
Zone 4
14%
Zenki Real Estate estimates that by the end of 2012
Luanda had 510,000 sq m of GLA, almost double
the estimates made at the end of 2010. The city’s
downtown area has the majority of the stock,
with a 55% share. However the area of Talatona
registered the greatest amount of growth in the
period, with over 52,000 sq m of new construction,
currently registering a stock that is 2.6 times greater
than that estimated in 2010.
Zone 3
7%
Zone 1
54%
Zone 2
25%
The available stock in recently constructed
buildings in Luanda is approximately 45,000 sq. m
of GLA, which results in a vacancy rate of 9%. The
CBD has the lowest vacancy rate at 6%.
Office building development in Luanda is still
happening at a high rate. The conclusion of
buildings currently under construction will add over
310,000 sq m to the existing stock by the end of
2014. It is expected that in two years the current
stock will show a growth of 62% up to a total of
820,000 sq m. Talatona has the largest area under
construction, a total of 145,000 sq m.
ZONE 1 - Downtown - CBD
ZONE 2 - Uptown
ZONE 3 - Praia do Bispo
ZONE 4 - Talatona
Source: Zenki Real Estate
It is important to note that the majority of the office buildings currently being built are already pre-let or sold.
The office center in Talatona is primarily the Belas Business Park venture, the first office buildings to have been
constructed in this area and one of the key reference sites for the Angolan office sector. However, the more
recently completed buildings, as well as those now under construction, are further afield, which means that
there is no longer a clearly defined Talatona office district.
GRAPH 4: EVOLUTION OF OFFICE STOCK BY LOCATION (2010/2014)
400 000 sq m
350 000 sq m
300 000 sq m
until 2010
250 000 sq m
until 2012
200 000 sq m
until 2014 (e)
150 000 sq m
(e) Estimated values
100 000 sq m
50 000 sq m
0 sq m
Zone 1
Source: Zenki Real Estate
Zone 2
Zone 3
Zone 4
ZREPORT
Angola Property Market
11
OFFICE DEMAND
The demand for modern office space in Luanda stems mostly from companies in the oil & gas (both the sector’s operators
and service providers), finance and public sectors. Companies in the oil & gas sector typically occupy large office buildings
(over 4,000 sq m) while companies that provide services to the operators, companies in the financial sector and public bodies,
generally take multi-occupied buildings. Companies that operate in the oil & gas sector, finance companies and public
bodies typically occupy whole buildings.
The demand for office space in new buildings by small and medium enterprises (SME) is comparatively low. Market prices are
still too high for most SME’s, which means that these companies are generally located in older buildings of a lesser quality.
Zenki Real Estate estimates that over the last 12 months the gross take up of office space in Luanda has reached 200,000 sq m,
65% of which has been occupied by companies in the oil & gas sector.
Around 50% of the occupied space is the result of sale or build-to-suit. However, currently there is a greater demand from
occupiers to lease, despite the fact that developers continue to give preference to sales, much like the residential market.
There has been a slight decrease in the rate of office space occupation: on the one hand investors give preference to the
acquisition of pre-let office space, whilst on the other hand market prices are still too high for an increase in the demand on
the part of SMEs.
Despite this, there is still a high demand for office space in Luanda, which makes it likely that there will continue to be strong
growth in this sector.
With the investments currently being made in the provinces, including the Sonangol refinery project in Lobito; the development
of the mining sector in the province of Huíla; the oil activity in Cabinda; and the LNG project in Soyo; there is likely to be, in
the mid term, an increase in the demand for office space in these cities, with an accompanying increase in values and an
improvement in the level of professionalism in the real estate sector.
Table 2: Major take up transactions in Luanda (2012 and H1 2013)
Building
Location
Occupier
Type
Area (sq m)
Torres do Carmo
CBD
BP
Sale
13,713
Total Headquarters
CBD
Total
Private
Ownership
8,200
Uptown
Ministry for Hotels and Tourism
Sale
4,800
CBD
BPC
Lease
4,500
Uptown
Ministry of Finance
Sale
2,700
Goya Building
Baía Building
Metropolis
Business Center
Source: Zenki Real Estate
Uptown Luanda
ZREPORT
Angola Property Market
12
OFFICE MARKET VALUES
Rent for prime office space in Luanda is currently 170 USD/sq m/month and the sale value is 12,000 USD/sq m. The
table below portrays these values for other business locations in Luanda.
Table 3: Recent Office Market Values in Luanda
Location
Rent Prices (USD/sq m/month)
Sale Prices (USD/sq m)
Minimum
Prime
Minimum
Prime
CBD
120
170
8,000
12,000
Uptown
105
160
6,500
8,000
Praia do Bispo
100
120
ND
10,900
Talatona
90
120
5,250
7,200
Source: Zenki Real Estate
The numbers show an increase relative to the previous year (13% in the CBD) as a result of a higher quality of
supply and a continued shortage of available product, mirroring what is happening in the residential market. In the
Uptown area, prime rent only applies to the Garden Towers building and again shows a significant increase relative
to the previous year’s values. Nonetheless, the value for prime rent in this location would be 120 USD/sq m/month
(9% more than the previous year).
The average cost of service charges in an office building in Luanda is 5.50 USD/sq m/month, which are typically
added to the rent.
Despite the high volume of construction, the
expectation is that the demand will continue to
be strong, which in turn means that prime rental
values for office space are not expected to
change much over the next 12 months. Average
rental values may however drop.
Market values in the main cities of the other
provinces do not follow a recognised pattern as
the values tend to be calculated in an informal
manner without regard to price per square
meter. There are however two Prime buildings
that deserve mention:
●The Acácias Place in the city of Benguela, with
a small area attributed to office space, with
prices of 33 USD/sq m/GCA for rent and 3.000
USD/sq m/GCA for sale.
●The Lubango Center, in the city of Lubango,
which was recently completed. The building
has both offices and other uses, with office
strata sale values of 4.250 USD/sq m/GCA.
Lubango Center, Huíla
ZREPORT
Angola Property Market
13
RESIDENTIAL MARKET
The residential market in Angola is still primarily located in Luanda, while in the capitals of the other provinces it
consists mainly of several neighborhoods with sub-standard construction, that the locals call “musseques”. These
neighborhoods were originally intended for the poorer classes but now tend to have houses that are over forty
years old that have been refurbished and are occupied by the middle-high and upper classes. There are also a
number of large residential projects that are backed by the Angolan government.
RESIDENTIAL ZONES IN LUANDA
High quality residential buildings with excellent finishings, developed in the post civil war period, are located in
Luanda’s city center (up and downtown) and in Talatona. These are generally occupied by the middle-high and
upper classes.
Recently new buildings have been developed for the emerging middle classes which tend to be located in the
peripheral areas of Luanda and Talatona, such as Morro Bento, Rocha Pinto, Samba, Benfica, Quifica, Camama,
Nova Vida, Lar do Patriota and Viana. These properties are generally available at lower market prices than those in
Luanda’s prime locations.
New large residential projects are being developed in other areas thus creating new Centers. These partly statefunded projects are destined for the lower social classes and despite being set far away from the city’s center they
have been in great demand. Examples of these are the Kilamba Kiaxi; KM 44 in Catete; Zango; and Cacuaco.
The analysis conducted by Zenki Real Estate concentrates on the residential segment destined for the middle, midhigh and upper classes, thus the analysis is restricted to four zones out of the seven identified below:
1 Downtown: Baixa, Coqueiros, Praia do Bispo, Ilha de Luanda and Chicala
2 Uptown: Alvalade, Bairro Azul, Maculusso, Maianga, Kinaxixi, Vila Alice, Combatentes, Valódia, Miramar,
S. Paulo, Bairro Operário
3 Morro Bento, Rocha Pinto, Samba
4 Talatona
5 Benfica, Quifica, Camama, Nova Vida, Lar do Patriota
6 Viana
7 Kilamba and Zango
1
2
3
6
4
5
7
7
Source: Zenki Real Estate/Google Earth
ZREPORT
Angola Property Market
14
RESIDENTIAL SUPPLY
In the city of Luanda (the Downtown and Uptown areas) the supply of modern residential accommodation is
mainly comprised of purpose built high-rise apartment buildings. By the end of 2014 over 1,050 new residential units
will become available.
Unlike the city centre, in Talatona there are more estates of residential ‘villas’ rather than apartment buildings.
However, the actual number of dwellings is approximately the same in both formats. The number of available
dwellings is currently low but In Talatona there are around 1,900 residential units under construction which should be
completed by the end of 2014. Of note is the fact that a single building, the Dolce Vita, represents 28% of the total
number of new dwellings.
It is worth mentioning that in a city with a high number of expatriate workers, the number of one bedroom residential units available for rent is very low.
Torre Ambiente, Luanda Marginal
ZREPORT
Angola Property Market
15
RESIDENTIAL DEMAND
The demand for residential units in Luanda comes from individuals, companies and investors. The wealthier classes and
companies, mainly from the oil sector, occupied the first quality buildings in Luanda in order to house their expatriate staff.
The acquisition of new apartments by the upper classes has slowed due to the small size of the market sector. However,
the corporate demand is very high, stemming mainly from companies in the oil & Gas and finance sectors. The recent
new supply in the city center is targeted towards the up-scale market, making it inappropriate to the requirements in
quality and price of the corporate occupiers.
In parallel to the corporate demand, there is also demand from individuals working in senior positions in companies
located in Luanda, looking to rent properties using money their company provides for housing purposes.
With the country’s economic development, a new middle to high class is starting to emerge in Angola. There has been
a recent increase in demand from young people employed in high-level jobs by international companies operating
in Luanda. The demand has been sustained by the special financing conditions being offered by major companies in
the oil and finance sectors to their employees. The sector’s demands have mainly been concentrated on the recently
constructed buildings located between Luanda and Talatona (Morro Bento, Rocha Pinto) and to the South and East
of Talatona (namely Benfica, Quifica, Camama, Nova Vida and Lar do Patriota), where prices are more acceptable.
The timings for product placement have also changed, with an increase in sales occurring after building completion.
This is a result of not only a lack of market liquidity and an increase in choice due to the greater number of projects, but
also of a greater amount of caution being exercised by buyers who want to see if buildings are actually completed with
the promised quality levels and characteristics. With the recent financial crisis, many developers have had difficulty in
finishing their projects.
In the residential market, institutional investors have been increasing relative to private investors. However, due mainly
to the increased demand for rentals over acquisitions, the residential investment market is still suppressed; there is a
mismatch between the supply, generated by developers that aim to sell, and the demand, which is geared towards
leasing.
The demand for residential real estate is still centered, almost exclusively, on the upper classes and corporates, due to
both a greater amount of supply in the market coupled with an almost non-existent market for mortgage loans.
Alvalade, Luanda
ZREPORT
Angola Property Market
16
RESIDENTIAL MARKET VALUES
The price for prime 2-bedroom apartment rentals located in the city of Luanda is 16,000 USD/month, a value that
drops to 7,500 USD/month in Talatona. The price for the sale of a prime 2-bedroom apartment in the city of Luanda
is 8,600 USD/sq m and 7,200 USD/sq m in Talatona. Over the past year there has been an increase in the market
values of properties located in both the city and Talatona due principally to the greater amount of high quality
construction coupled with a continued lack of available property.
The table below presents the rental and sale values of prime property for different sizes in the above-mentioned
locations. The rental prices include any service charge/management costs.
Table 4: Residential Market Values
Apartments
Houses
Zone
1-bedrm
2-bedrm
3-bedrm
4-bedrm
3-bedrm
4-bedrm
Prime Rental Price (USD/
month)
12,000
16,000
23,500
30,000
ND
ND
Prime Sale Price (USD/sq m)
8,500
8,600
12,500
11,500
ND
ND
Prime Rental Price (USD/
month)
8,000
12,000
17,000
25,000
20,000
46,000
Prime Sale Price (USD/sq m)
6,300
7,000
7,800
7,700
8,500
11,200
ND
2,800
4,000
4,800
ND
ND
Prime Sale Price (USD/sq m)
4,100
4,000
4,000
4,300
ND
ND
Prime Rental Price (USD/
month)
3,700
7,500
8,500
10,000
16,000
20,000
Prime Sale Price (USD/sq m)
7,000
7,200
7,200
7,200
8,500
11,200
Downtown
Uptown
Prime Rental Price (USD/
month)
Morro Bento/Rocha
Pinto
Talatona
Source: Zenki Real Estate
In the remaining province capital cities, the respective figures are calculated informally, based on an agreed
amount for the property’s total value. There are some properties worth highlighting here:
•At the Anfiris Building, located in Restinga, Lobito, 2 to 4-bedroom apartments are being marketed at 4,700 USD/
sq m/PGA.
•In Lubango, a building for multiple use has recently been finished, called the Lubango Center, and is considered
the prime site in the city with apartments selling at 3,800 USD/sq m/PGA.
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Angola Property Market
17
RETAIL MARKET
RETAIL SUPPLY
The retail market is still in its early stages of development, both in terms of quality and diversity of retailers, and in
terms of the shopping centers themselves.
There are currently only three modern shopping centers in the province of Luanda. The first to be opened was Belas
Shopping (in 2007), followed by Ginga Shopping and Atrium Nova Vida. Outside the province of Luanda there is
Millennium Shopping in Lubango (Huíla). At the moment, there are six shopping centers being built, all in the city of
Luanda.
The retail park format is still a recent concept. The Lobito retail park in the province of Benguela was the first
commercial venture of this type to be opened in Angola (2012). It was followed by the opening of the Viana Retail
Park in Luanda in the first quarter of 2013. There are two more retail parks projected for Viana, the Luana and
Mundial Shopping, whose construction has not yet begun.
As for high street retail, it is still spread across the city with no consolidated specific commercial areas. New buildings
have areas for commerce on their ground floors, which are quickly occupied by service companies, namely banks,
insurance and telecommunications agencies, and there is a general lack of quality retail space.
Table 5: Pipeline of retail schemes in Luanda
Name
Location
Format
Area (GLA)
Kinaxixi Shopping
Kinaxixi
Shopping Center
27,402
Luanda Shopping
Alvalade
Shopping Center
35,000
Shopping Fortaleza
Marginal
Shopping Center
26,000
Kinaxixi
Shopping Center
6,000
Marginal
Shopping Center
5,784
Rainha Ginga
Shopping Center
6,000
Sky Center
Torres Kianda
Vista Club Shopping
Source: Zenki Real Estate
RETAIL DEMAND
The leading players in Angola’s retail sector are the result of partnerships established between Angolan companies
and international retailers, mainly from South Africa and Portugal, and are mainly in the area of food distribution
and wholesale, whilst the high-end and luxury sectors are still poorly represented. With the opening of new shopping
centers and retail parks, and the increase in the middle classes with greater spending power, it is expected that
more international retailers, namely from industries such as fashion, accessories and catering, will begin to move in.
Angola, and in particular Luanda, has great potential for success in this sector due to the current lack of supply
coupled with the expectation of economic and demographic growth and the emergence of a middle class.
RETAIL MARKET VALUES
Rental prices for retail area in Downtown Luanda vary between 50 and 80 USD/sq m/month for refurbished high street units.
In new buildings, sale prices vary between 9,000 and 12,000 USD/sq m.
In the recently inaugurated retail parks, prime rental values are at 35 USD/sq m/month (for units with areas of around 500 sq m).
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Angola Property Market
18
INDUSTRIAL AND LOGISTICS MARKET
INDUSTRIAL AND LOGISTICS ZONES
The main areas occupied by the industrial and logistics sector in the Province of Luanda are: Estrada do Cacuaco;
Benfica – Lar do Patriota; Viana; and Estrada de Catete.
1 Estrada do Cacuaco
1
2 Benfica - Lar do Patriota6
3 Viana
4 Estrada de Catete
3
2
4
Source: Zenki Real Estate/Google Earth
CHARACTERIZATION
The industrial sector is one of the Government’s main areas for investment over the next few years, as it has a
direct impact on Angola’s economic growth. One of the main factors for this sector’s growth is the creation of
Special Economic Zones (ZEE) in several provinces across the country, the first of which is the Special Economic
Zone of Luanda-Bengo in Viana. This ZEE has a total area of 8,300 hectares and its first phase has approval for the
construction of 73 factories. Created three years ago, the Luanda-Bengo ZEE already has 22 factories in operation.
Another measure aimed at creating a more dynamic economy which impacts on the industrial and logistics sector,
is the creation of industrial centers in several of the country’s provinces. The industrial centers already created or are
in development are: Viana – Luanda South; Cacuaco – Luanda North; Catumbela – Benguela; Futila – Cabinda;
Lucala – Kwanza North; Caála – Huambo; Matala – Huíla; Icolo – Bengo; Bengo – Bengo.
The industrial sector is also in its very early stages of development; it is the sector where the greatest amount
of growth is expected and where the greatest opportunities for investment exist. The majority of recently built
industrial and logistics enterprises have been developed to the specifications of the owner-occupier’s built-tosuit schemes. More recently private developers have built warehouse and industrial complexes and of these the
Complex Parkgest and Viana Park, both located in Viana, standout.
The table below summarizes the values for prime industrial real estate in the four locations mentioned above.
Table 6: Values for prime industrial and logistics real estate
Location
Prime Rent Value (USD/sq m/month)
Prime Sale Value (USD/sq m)
Estrada do Cacuaco
13
1,400
Benfica – Lar do Patriota
13
1,800
Viana
15
2,000
Estrada de Catete
14
1,500
Source: Zenki Real Estate
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Angola Property Market
19
TOURISM MARKET
DEVELOPMENT OF TOURISM IN ANGOLA
Following a 10-year period of national reconstruction a Master Plan was presented in 2011, the PARTENON, that
defines the Strategy for the Development of Tourism in Angola until 2020.
Several fundamental issues were identified as the main hold-ups for rapid development of Tourism: including a lack
of infrastructure and support services and non-existent promotion of the country as a tourist destination.
PARTENON predicts that the development of tourism in Angola will be focused and in phases, pertaining to both the
development of supply and demand. The following phases were defined:
● 1st Phase: Investment on Domestic Tourism, focusing on Development Centers (until 2013);
● 2nd Phase: Consolidation of the Domestic Tourism investment in Regional Market with a diversification of investment and promotion (until 2015);
● 3rd Phase: Investment in the increase of the sector’s global competitiveness, with emphasis on the International
Market (from 2016).
Objectives defined by PARTENON until 2020
4.6 million tourists, of which 60% should be domestic
4.7 billion USD in Tourism revenue
1 million people employed in activities directly connected to the sector
Over 3% weight in Angola’s GDP
The studies for the development plan are currently underway, focusing on the priority Tourism Development Centers,
selected for their potential for tourism in the short term, which are: the Cabo Ledo Center; the Calandula Center;
the Okavango Basin Center.
Cabo Ledo, Bengo
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Angola Property Market
20
HOTEL INDUSTRY
Luanda continues to stand out amongst other destinations in terms of hotel accommodation supply, generating
80% of the sector’s revenue. The provinces of Huíla and Benguela follow behind. In the remaining provinces the
lack of hotels is commonplace.
The hotel industry in the city of Luanda is characterized by inflated prices with respect to the quality of service
offered, and is composed mainly of 3 and 4 star hotels, apartment hotels and low quality boarding houses.
Nonetheless the occupation rates are quite high due to both the ever-increasing flux of people arriving in Luanda
for business and to the shortage of choice in the higher segment.
The city’s reference hotels are located in the Downtown area and in Alvalade, Uptown. The majority of 4 star
hotels are located Downtown and these are the ones that offer the best quality services: Hotels Presidente,
Trópico and Skyna and more recently Baía and Epic Sana (the latter being the first 5 start hotel in Luanda’s
downtown, inaugurated in 2012).
Cabo Island is the area with greatest touristic potential in Luanda. However, despite its natural appeal, hotels are
scarce.
Uptown other reference hotels can be found, such as the Hotel Alvalade which has a business center.
The number of medium and high quality hotels (3, 4 and 5 stars) in the city center totals 16, offering a total of
2,000 rooms.
The average annual occupation rate is 75% and the Average Price is 375 USD/night (with breakfast and taxes
included). The basic rates can go up to 550 USD/night in the city’s best hotels.
Several hotel projects are being developed in Luanda which aim to balance the supply in the sector. It is estimated
that the total number of hotel rooms available will increase by 66% by the end of 2015.
Table 7: Future Hotels
Name
No. of Stars
No. of Rooms
Status
Blue Diamond
5
450
Under construction
Pestana Palace
5
300
Project
VIP Grand Luanda
(Empreendimento
Comandante Gika)
5
370
Under construction
Hotel Diamante
4
174
Soft opening phase
Total
1,294
Source: Zenki Real Estate
The main hotel groups represented in Angola are of national origin, such as the AAA, Chicoil, HCTA, Imogestin and
the Ritz, or are Portuguese hotel chains that have expanded to Angola, namely TD Hotels and SANA Group.
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Angola Property Market
21
INVESTMENT MARKET
The investment market in Angola, meaning the acquisition of real estate that generates income, is still in its
very early stages of development. The rental market and ownership of real estate is still not regulated and the
regulations for real estate investment funds have still not been published, although it is expected to happen in
the near future.
The first investors in real estate in Angola that began to emerge in the post-civil war period were private upperclass citizens who acquired real estate, mostly in the form of office buildings and residential, without guaranteed
occupation, which was not a concern given the lack of general supply.
Currently investments are only made against guarantee of rental income and investors are still predominately
Angolan nationals and companies backed by investment banks, as in the case of BESAACTIF.
The demand for real estate investment opportunities is mainly for office and residential units, and, less so,
commercial retail / industrial space.
Yields are currently between 15% and 18% in the office and retail markets, and between 12% and 17% in the
residential market. With prospects of sustained economic growth for the years to come and a reduction in the
inflation rate, the tendency will be for a decrease in the perceived country-risk and an accompanying decrease
in yields.
With the publication of legislation that regulates the Angolan legal framework for real estate investment funds (“RJFII”),
a stimulation and increase in the level of professionalism and maturity in the real estate investment market is expected,
not only based on a greater number of transactions, but also on an injection of foreign capital.
Sky Center Complex, Luanda
ZREPORT
Angola Property Market
22
Global Research and Consulting This report was prepared by ZRE Angola’s Research team with the support of CBRE Global Research and Consulting – a team of
prestigious researchers and consultants that develop real estate market research, econometric analyses and strategic consultancy
for investors and real-estate owners all over the world.
ZRE’s Final Comments
ZRE has taken the information contained in this document to be valid. Despite not doubting its accuracy, we have not verified it and
do not offer any guarantees on its exactness and fullness. Any projections, opinions or estimates are given solely as examples and do
not necessarily represent any current or future market changes. This information is destined exclusively for ZRE clients and may not be
reproduced without previous consent from ZRE.
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