Thursday, 1 October 2026
Africa’s commercial property markets are entering a period in which access to capital could determine which projects move forward and which remain on the drawing board. Urban expansion, demand for modern logistics facilities, housing shortages and the growth of consumer markets continue to create opportunities, but conventional bank lending remains difficult or expensive in several major economies. The result is increasing pressure on developers to combine bank finance with institutional capital, development finance and new capital-market structures.
The scale of Africa’s wider financing challenge provides important context. The African Development Bank estimates that the continent requires around $130–170 billion of infrastructure investment annually, with a financing shortfall of roughly $68–108 billion. These figures do not represent a commercial real estate funding gap, but infrastructure and property development are closely connected. Roads, electricity, water, transport networks and digital infrastructure can determine whether new industrial parks, residential districts, offices and mixed-use developments are commercially viable.
Financing conditions also differ considerably between countries. Nigeria’s central bank reduced its policy rate to 23% in September 2026, while Ghana’s rate stood at 14% following its September meeting. Although monetary conditions have eased in some markets, developers can still face high borrowing costs, shorter loan maturities and conservative lending requirements. Currency volatility adds another layer of risk where projects generate rents in local currencies while financing obligations are denominated in dollars or euros.
Land ownership and collateral can present additional obstacles. In markets where land registration is fragmented or ownership rights are difficult to establish and enforce, lenders may be reluctant to accept property as security. This particularly affects new development, where financing already depends heavily on clear title, reliable valuations, pre-leasing and confidence that the completed asset can generate stable income. Improvements to land administration could therefore have a direct effect on the availability of property finance.
Domestic institutional capital represents one possible source of longer-term funding. Africa’s pension funds, insurers and other large financial institutions control substantial pools of savings, although their exposure to property varies widely between markets. South Africa provides one of the clearest examples. The Public Investment Corporation reported that unlisted property investments managed for the Government Employees Pension Fund and other clients were worth around R54 billion in its 2025 financial year, covering sectors including offices, retail, industrial property and student accommodation.
Development finance institutions are also likely to play a larger role, particularly where commercial lenders cannot provide the required maturity or assume currency and development risks. The African Development Bank approved approximately $10.9 billion of new operations during 2025 and reported mobilising another $4.3 billion from development partners, institutional investors and commercial lenders. IFC and other institutions are meanwhile expanding local-currency and structured financing, potentially reducing the mismatch created when African projects earn local-currency revenues but borrow internationally.
Capital markets offer another route once properties are completed and generating predictable income. Kenya provided an important example in March 2026 when the ALP Industrial REIT listed on the Nairobi Securities Exchange. The vehicle, backed by logistics properties, became East Africa’s first industrial REIT and the NSE’s first US-dollar-denominated listed security. Such structures could allow developers to recycle capital from completed properties while giving institutional investors access to income-producing real estate without taking direct development risk.
Africa’s next commercial property expansion is therefore unlikely to be financed through traditional bank lending alone. Banks will remain important, but pension capital, development institutions, private credit, REITs, infrastructure investors and international institutions are likely to play increasingly complementary roles. For developers, the competitive advantage may shift from simply securing land and planning projects to creating assets with clear ownership, resilient cash flows and financing structures capable of attracting several different pools of capital.
Source: © CIJ.World Africa Research & Analysis Team
