This text was Extracted from by Knight Frank’s “Africa Report 2015: Real Estate Markets in a Continent of Growth and Opportunity.
Despite the recent construction of new buildings, Luanda still suffers from a lack of good quality office stock, and occupancy costs remain the highest in Africa. It is estimated that the majority of the 250,000-300,000 sq m of office space being brought to the market during 2014- 15 has already been either pre-let or sold. The market is dominated by occupiers from the oil sector, and it is expected that recent falls in oil prices will affect demand. The prime office areas are the Ingombota and Baixa districts in the city centre, while secondary office areas include Maianga, Alvalade and Miramar. There is also notable office development activity to the south of the city in Talaton.
The retail sector in Luanda is still at a nascent stage of its development. While international retailers have started to be attracted by the growth of Luanda’s middle class, high set-up costs and the difficulty of entering the market are holding many back. There are only three modern shopping centres in Luanda, although several others are under construction. However, many of the new developments have suffered from a lack of funding and have been slow to materialise. For example, the Comandante Gika project, originally planned to be completed in 2010, remains under construction. A 10,000 sq m Kero hypermarket has opened in the complex, but it remains the only tenant while development continues around it.
Industrial market activity is mainly associated with the oil sector, and most of the existing stock is owner-occupied. The principal industrial locations are Luanda port and Viana to the east of the city, while there are also established warehouse districts at Benfica, the Cacuaco road, and the road to Catete. The logistics property sector is relatively undeveloped and immature, and good quality warehouse space is scarce. The Angolan government operates the ZEE (Special Economic Zone) in Viana, where warehouse properties can be leased for a fraction of the cost of privately- owned parks, but there are strict criteria governing appropriate tenants which make it extremely difficult to locate there.
The prices of good quality villas and apartments in Luanda have been among the highest in the world in recent years. However, a virtually non-existent mortgage market and significant volumes of new supply have put downward pressure on prices. This trend is expected to continue as a result of falls in oil prices. New residential property tends to be located either in central Luanda or to the south in Talatona. This location provides lower cost housing and is popular with ex- pat families. Prime four bedroom houses rent for around US$15,000 per month in Talatona, compared with US$25,000 per month in the city centre.
Source: Knight Frank