Snapshot: Tanzania Real Estate Market 2015

Dar es Salaam Dar es Salaam

This text was Extracted from by Knight Frank’s “Africa Report 2015: Real Estate Markets in a Continent of Growth and Opportunity.

Office Market

Dar es Salaam remains the main focus of office market activity in Tanzania, with a number of significant new developments coming to the market in the city centre. There has also been increased activity in locations over the Salander Bridge, particularly on Bagamoyo Road and in the Oyster Bay and Peninsula areas. Following the coming into force of the Unit Titles Act of 2008, Dar es Salaam is seeing the emergence of an office sales market. However, foreign companies and individuals are not permitted to own property via a unit title. The only available options for overseas companies are to lease space, or to develop or purchase a whole building.

Retail Market

The retail market in Dar es Salaam is still largely focused on small retail centres in residential areas. The Kenyan supermarket chain Uchumi has been targeting this market and now has four outlets in Dar es Salaam, three of which operate for 24 hours. The Nakumatt chain has also been expanding its presence in Tanzania, opening three stores during 2014, including a branch at Mlimani City Mall in Dar es Salaam. These new stores join the existing Nakumatt in the town of Moshi, which opened in 2011. The three-storey Mwanza City Commercial Complex, the first large-scale retail scheme to be developed in the city of Mwanza, is expected to be ready for occupation in July 2015, with TSN Supermarket being the anchor tenant.

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Industrial Market

The industrial property sector in Tanzania is dominated by owner-occupiers and is largely focused on the provision of warehousing space and light industrial activities. Most of the prime industrial areas in Dar es Salaam are located on Nyerere and Mandela Roads, which offer easy access to the port and a gateway into the rest of the country via Morogoro Road. There are also some developments in the Chang’ombe, Mwenge and Mikocheni areas. Industrial real estate in other major cities is typified by older general purpose warehouses which are mostly occupied by public institutions.

Residential Market

The prime residential areas of Oyster Bay and the entire Msasani Peninsula in Dar es Salaam are seeing a significant number of redevelopments, as houses are converted into multi-occupied apartment buildings with the aim of maximising returns. The sale of unit titles is emerging but, as with office premises, foreigners are not able to own apartments. To cater for the general population, a large volume of low and middle-income housing is being developed by the public sector for sale across the country. In Dar es Salaam, the pension funds expect to deliver more than 8,000 residential units in Kigamboni alone before the end of 2015. The Tanzania Buildings Agency is also planning to build 2,500 units in 12 regions across Tanzania.

Source: Knight Frank