Could Somalia Be The Best Real Estate Investment In The World?
War-torn horn of African nation, Somalia, could be the best long-term real estate investment destination in the world today due to a high population growth expected in the region by the close of the century, according to a study by a Swedish professor Hans Rosling.
Africa is expected to account for over two-thirds of the world’s additional 3 billion people by the end of the 21st century, while a third of them will be in Asia.
Rosling predicts that demand for Somalia’s surf-beaten golden sands beaches, which are the longest in Africa will increase as a growing middle class in Asia and Africa seek for new holiday destinations along the Indian Ocean.
“The Indian Ocean will be the Atlantic of the next generations,” the Financial Times quoted Rosling saying in the study.
While Somalia might not look like much of a destination right now, due to the two decade-long civil war between government forces helped by African Union units and Islamic militant Al Shabab that seek to install sharia laws in the country, its prospect could rise in the long term once the conflict is diffused.
With 3 billion people in the middle-class in Asia by 2030, according to forecasts by the Brookings Institution, investment on new luxury destinations away from the traditional one will be rewarded with more spending be these new consumers.
“The wealth created in Asia has hit the cities but it hasn’t yet hit the leisure property industry, with the possible exception of Japanese ski resorts,” Yolande Barnes, director of world research at Savills, told the Financial Times.
Property companies, such as Knight Frank, are already acting on this trend.
In its 2015 report, Knight Frank said that Africa’s rapid population increase coupled by a strong economic growth across several countries on the continent was building a formidable middle class that could prove too attractive for global real estate investors to ignore over the coming decade.
According to the report, Africa’s population is estimated to reach four billion people by the start of the next century, “with nearly one billion of these people in Nigeria alone.”
“Demographic growth produces economic growth in a much shorter period of time — both from people moving to the place and people being born there,” said Laurent Morel, chairman of Klépierre, Europe’s second-biggest listed property company, which specializes in shopping malls.
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