Unpacking thriving/new markets and strategies to invest in the real estate sector

By Daniel Kontie

As Ghana’s real estate sector evolves, developers are increasingly seeking opportunities beyond traditional investment options. Emerging markets present a wealth of opportunities for developers seeking to expand their horizons.

These markets are driven by economic growth, infrastructure expansion, industrialization, foreign investment, diaspora influence, consumer demand etc. However, navigating these thriving and emerging market trends require strategic planning and data-driven decision-making.

This article explores thriving and emerging opportunities whilst offering effective strategies for developers looking to expand investment in Ghana’s real estate sector. For developers, understanding the unique characteristics and potential of these markets is the first step towards successful expansion

The growth of thriving and emerging markets in Ghana

Ghana’s real estate sector remains a key contributor to economic growth. According to Statista (2023) the real estate sector in Ghana contributed about 1.6 billion Ghanaian cedis (Ghs), approximately 121.2 million U.S. dollars, to the country’s Gross Domestic Product (GDP).

Besides, Ghana’s real estate market is projected to reach a value of US$533.34 billion by 2025, with residential real estate dominating at US$456.11 billion and a projected annual growth rate (CAGR 2025-2029) of 3.44%.

Moreover, urbanization rate continue to rise, with over 58.6% of Ghanaians residing in urban areas according to Worldometer (2024). This development has led to a higher demand for infrastructural developments in major cities such as Accra, Kumasi etc creating a huge demand for infrastructure and investment opportunities for potential investors.

Additionally, with Ghana’s housing deficit still at a staggering deficit of 1.8 million units. The demand for affordable housing too remains a crucial driver for expansion, creating an avenue for developers to establish a strong market presence in other emerging sectors.

With the right industry information about these thriving and emerging opportunities in the real estate sector, investors can diversify their investment portfolio that will create wealth for both investors and the state at large.

Thriving and emerging markets in Ghana’s real estate sector

It is important to note that the real estate sector have witnessed a significant change in the past few years leading to the thriving of existing and the emergence of new markets. For want of space we shall be treating a few of these in this article.

Key among these thriving and emerging markets are these: affordable housing, student accommodation, high and mid-end properties, office spaces, retail spaces, hospitality, warehousing and logistics, manufacturing infrastructure, land banking etc. We shall be examining each in brief in the subsequent paragraphs.

Rising demand for affordable housing

The demand for affordable housing still remains increasingly high as supply lags significantly behind demand. With exception of the real estate boom in 2021 that witnessed the reduction of the deficit from 2.8 million to 1.8million, nothing much has changed in the affordable housing sector. This gap presents a huge opportunity making it a thriving existing market for investors to tap into.

Rising demand for student accommodation

For some time now, Ghana is known to be Africa’s Hub for Tertiary Education contributing significantly to the investment opportunities in the student accommodation sector. According to the National Council for Tertiary Education (2016) Ghana has positioned itself as one of the major providers of quality higher education in Sub-Saharan Africa.

For the past decade, Ghana has enacted policies, which have indicated to the global community, the strong intention to enhance the competitiveness of our tertiary education system. For this reason, the quota-based admission policy for foreign students was lifted in both private and public institutions.

This opened the floodgate to students and faculty of countries within Sub-Saharan Africa including Nigeria, Cameroon, Guinea, Gabon, Liberia, Sierra Leone, Congo Brazzaville, Equatorial Guinea, Togo, Ivory Coast, Zambia, Gambia, Rwanda and some East and southern African Countries.

This trend has skyrocketed student’s accommodation demand in the cities making property investment in Ghana exceptionally profitable.

Beside this, our national university stock has fifteen (15) public universities, nine (9) professional institutions and one hundred and twenty (120) private universities, with many of these private universities admitting twice a year etc. This has increase the demand for student accommodation making that sector one of the thriving sectors for investment.

Rising demand for mid and high-end properties

Mid and high-end property demand remains significantly high as a result of the dramatic growth of the Ghanaian middle class coupled with the diaspora taste and preference for these properties.

This sector witnessed a dramatic growth after the implementation of the “Year of Return” and the “Beyond the Return” policies of the Nana Addo Danquah, Dr. Bawumia led administration between 2016 and 2024. This has triggered huge investment prospects in this sector at the time and remains considerably high today.

Increasing demand for Grade-A offices and shared work spaces

With many medium scale businesses in Ghana who do not have the capacity to rent large commercial spaces, there was the need for a market response to find an affordable office solution to these medium scale businesses.

This has led to the emergence of Grade-A and Shared Workspaces across various cities in Ghana leading to an improved occupancy rate for high-rise commercial spaces in cities that were left unoccupied for years. This has also presented a huge investment potential for prospective investors.

Increasing demand for retail spaces

The Ghanaian taste and patronage for supermarkets and shopping malls has witnessed a dramatic turn in recent times. This appeared to have been influenced by the cosmopolitan nature of our cities in recent times.

This turn of events has led to high demand for retail spaces across the various cities in Ghana thereby making investment in this sector very exciting for prospective investors. Take Melcom Ghana for example, Melcom Ghana started the Melcom Mini model a few years ago which has led to the creation of a more decentralized medium size shopping Malls across all local suburbs in all the major cities in Ghana.

Thriving hospitality industry

The hospitality sector has not been left out; there appear to be a slide shift in the traditional hotel style to a more affordable system of private accommodation in recent times.

This has led to the proliferation of guesthouses, hostel facilities, AirBnB etc in our major cities. The affordable rates charged by these facilities have led to an increasing demand for them making investment prospects very lucrative in the sector.

Warehousing, logistics and manufacturing spaces

The gradual shift in the Ghanaian economy from the usual services sector to industrialization has triggered a higher demand for warehousing, logistics and manufacturing infrastructure in the last few years.

The evidence is quite clear as we can witness the massive investment in warehousing, logistics and manufacturing infrastructure around all industrial areas in Accra, Takoradi, Kumasi etc.

In Accra in particular, this can be seen in Tema Free Zone Enclave and on the Tema Aflao highway stretch up to Ada in the Greater Accra Region.  This has driven demand significantly in this sector making investment prospects very promising.

Land banking investment prospects

Apart from the land ligation and encroachment challenges, land banking investment still remains one of the most thriving markets in the real estate sector.

The rapid urbanization, migration and industrialization have led to a quantum jump in land price appreciation over the years. Provided one has the capacity to ward-off encroachers, land banking still remains one of the most rewarding investment options in the real sector in Ghana.

Key strategies for new market entry & expansion

In this section, we shall be delving into some crucial strategies developers need to expand their market share in the industry. For want of space, we shall look at just a few.

Conduct market research and feasibility studies

Developers must base their expansion decisions on comprehensive market research and analysis. This involves assessing economic trends, demographic shifts, demand and supply gaps etc.

Market research should evaluate factors such as disposable income levels, infrastructure developments, and regulatory environments. For example, Takoradi’s oil-driven economic growth has led to an increased demand for both residential and commercial properties.

Similarly, Tamale’s status as an agricultural hub presents opportunities for industrial real estate and affordable housing developments.

Feasibility studies should include site assessments, projected returns on investment, and risk evaluations. Strategic collaboration with local stakeholders, such as municipal authorities and financial institutions, can provide deeper insights into market conditions and potential challenges, which will inform decision making for investors.

Strategic location selection

Selecting the right location is a crucial element for real estate developers entering into new market and to expand their scope. This strategy involves identifying, evaluating, and selecting locations that offer the most potential for growth, profitability, and sustainability.

Developers should consider proximity to infrastructure such as roads, electricity, and water supply, as well as access to key economic zones and some social amenities.

Develop a clear expansion strategy

After conducting market research and feasibility studies, one should be able to develop a clear expansion strategy, which will inform every action and decision to be taken. For instance, the developer can set SMART goals, a basic prerequisite for success.

Secure diverse financing options

Access to capital remains a major challenge to some developers willing to explore new and emerging markets, this put developers on their toes to come up with innovative financing models or solutions.

In one of our previous articles titled “Alternative Financing Models for Real Estate Development”, we explored a few models among which were the off-plan financing model, Construction financing model, crowd funding financing, mortgage financing etc.

For more insight, kindly get this article from our website or on the Business and Financial Times Online Platform.

Conclusion

As I conclude, the Africa Continental Engineering & Construction Network Ltd, as part of our real estate consultancy, offers all the above services and more. Interested readers may contact us via the email address provided in this article or subscribe to the Business & Financial Times Newspaper for more insight from our articles on the Construction & Real Estate Digest Column.

Having explored the prospects in these thriving and emerging markets, it is also important to note that these opportunities presents challenges as well, but by leveraging on industry insights, strategic partnerships, innovative financing, sustainable construction methods, and comprehensive trends and market analysis, real estate investors can successfully seized opportunities in the emerging and thriving markets to expand their investment portfolios. As Ghana continues to grow, forward-thinking developers who align with market needs will be best positioned to thrive in the evolving real estate landscape.

Reference:

• Center for Affordable Housing (2023), Housing and Infrastructure Deficits across Africa.
• Worldometer (2024): Ghana Population demographics and Income Distribution Report.
• Ghana Population and Housing Census (2021): General Report, Demographics and Income Distribution.
• Statista (2024), Real Estate Market Trends and Projections for the years 2025 and beyond.

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