Ghana Real Estate Sector: Highest Returns in the Short Term
Investors’ appetite in Ghana is rising following the recent oil discovery. As some of those investors setup businesses to profit from the country’s burgeoning economic growth, demand for housing and office spaces is also growing.
Ghana Real Estate Sector: Highest Returns in the Short Term
As the Chief Executive Officer of UT Bank, Mr Prince Kofi Amoabeng, said in an interview, Ghana has always had a positive potential for growth even without its recent oil discovery and exploitation. That means investors’ appetite in the country will now rise following the oil production. As some of those investors setup businesses to partly profit from the country’s burgeoning economic growth, demand for office spaces will also rise, creating a ready market for companies in that segment.
Ghana has always had a positive potential for growth even without its recent oil discovery and exploitation. That means investors’ appetite in the country will now rise, and so will the demand for office spaces.
Currently, dozens of companies have sprung up to construct skyscrapers of which they lease portions to the business community. According to Mr Martin Beeko, Marketing Executive of Manet Group, such high-end segments in the real estate industry are the areas with the highest yields. On the area, an investor will get the best returns on investment. Mr Beeko said that “The highest return you can get in the short term is the high end.” But if one is looking for longevity and not just something you can reap in a few years, he said the low-income segment will be very profitable.
He, however, mentioned high interest rates, land related challenges and high cost of raw materials which are often imported, as some of the challenges facing the industry and called for a stronger relationship between the government and the sector players towards addressing it. “Financing is a huge problem. We don’t have access to foreign loans, which are offered at significantly lower interest rates. We have had to rely on the very high interest rates in Ghana. It is significantly lower now but 26% is not low. We consider it low because we’ve come from a background where we’ve had to deal with as much as 50% interest rates,” he said.
And for investors who wish to come into the real estate sector, Mr Beeko advised that they come in with low cost funds. “That’s a key area (financing) they need to focus on. If you have access to those funds, it will help greatly. Ghana has a growing economy and the opportunities are limitless.”