- Africa’s real estate sector, expected to reach $332.3 billion by 2033, is growing at a CAGR of 4.51 percent, driven by a growing middle class and the need for more infrastructure.
- African real estate yields, which average 8 to 12 percent in primary markets, are higher than those in many developed areas.
- Real estate investments in Africa have a lot of potential, but also have problems such as inconsistent regulations and a lack of infrastructure, which can affect returns in new real estate markets.
As cities grow and new real estate markets mature, the African real estate market is changing on a massive scale, attracting billions of dollars from around the world. According to the United Nations World Population Prospects 2024, the continent’s urban population will double to 1.4 billion by 2050. This makes cities such as Lagos, Nairobi and Accra very attractive for investors.
This increase, expected to reach $332.3 billion by 2033 at a CAGR of 4.51 percent (Market Data Forecast, 2025), is driven by a growing middle class and the need for more infrastructure. African real estate yields, which average 8 to 12 percent in primary markets, are higher than those in many developed areas.
This makes Africa a good place for global investors to diversify their portfolios, while the US and Europe are slowing down, says Knight Frank Africa Report 2024/25. As industrial logistics hubs grow, the real estate narrative on the continent is changing from risk to reward, with the market potential currently at $21.9 trillion.
Urbanization wave is driving up demand for Africa’s real estate
Cities in Africa are growing at 3.5 percent per year, which is the highest rate in the world, according to the OECD’s African Urbanization Dynamics 2025 data. This changes the real estate market. By 2050, this growth will add 700 million people to cities, increasing the need for housing, offices and retail.
In Lagos, Nigeria’s megacity, property prices are expected to reach 50 million euros by 2025, with yields of 8 to 10 percent in places like Ikeja (Homes Bay, 2025). Nairobi’s real estate is being helped by an urban growth rate of 3 percent, bringing in $500 million in foreign direct investment (FDI) for commercial developments, according to Knight Frank Africa Report 2024/25.
In Accra, the capital of Ghana, the best housing markets have yields of 6 to 8 percent. This is helped by an urbanization rate of 3.2 percent. With the African real estate market growing at a compound annual growth rate (CAGR) of 5.5 percent until 2028 (World Bank, 2025), this boom is good for investors. According to PwC’s Africa Real Estate Outlook 2025, a focus on mixed-use developments delivers global capital returns of 10 to 15 percent.
Emerging real estate markets in Africa: places where you can make big money
Emerging property markets in Africa are attracting investor attention, with yields exceeding 8 percent in major cities, according to the report from property tracker Knight Frank Africa. Lagos has the highest rental yields, between 8 and 10 percent, in mainland areas such as Yaba.
This year, the average price is expected to reach ₦50 million (Homes Bay, 2025). Commercial real estate in Nairobi has yields of 6 to 9 percent, thanks to technology hubs and logistics (Orchid Island, 2025). The Accra market yields 6 to 8 percent, and the residential and retail sectors are growing at 5.5 percent per year.
Africa’s 3.5 percent urbanization rate, which brings 3 million people to cities every month, is helping these markets. According to PwC’s industrial real estate outlook for 2025Africa’s emerging real estate markets promise logistics returns of 12 to 15 percent for investors. Lagos-based Eko Atlantic, for example, gives 10 percent for luxury homes, Visual Capitalist notes.
The new place to invest: industrial logistics hubs in Africa
The growth of cities and e-commerce is driving the growth of industrial logistics hubs in Africa. Tatu City in Nairobi yields about 8 to 10 percent for warehouses, allowing the city to grow by 3.5 percent, Knight Frank notes.
The Lekki Free Zone in Lagos, Nigeria, has a logistics efficiency of 9 percent, even though the city is growing at 3 percent, Homes Bay statistics show. Tema Port hubs in Accra Ghana earn 7 to 9 percent more money thanks to AfCFTA (Statista, 2025). PwC says the logistics market in Africa is worth $150 billion and growing at 5.6 percent per year. This means that industrial estates can achieve a return of 12 percent (Knight Frank, 2025). Hubs like Tatu City promise investors a value of $500 million by 2030.
Problems and dangers of investing in Africa’s real estate
Real estate investments in Africa have a lot of potential, but also have problems such as inconsistent regulations and a lack of infrastructure, which can affect returns in new real estate markets. Due to changes in the foreign exchange market, yields in Lagos fall by 2 percent (Homes Bay, 2025).
The 3.5 percent growth of Nairobi’s urban population is putting pressure on logistics, increasing costs by 15 percent (OECD, 2025). There are disputes over land ownership in Accra, which has reduced investor confidence. Mitigate with due diligence for a net return of 8 percent to 12 percent (PwC, 2025).
Investors around the world should put African real estate at the top of their list of places to invest in areas where urbanization is booming, such as Lagos, Nairobi and Accra, where they can earn returns of 10 percent or more.
Work with local businesses to find your way and explore funds like Knight Frank to spread your money around. Act now: the African market will be worth $332 billion by 2033 (Market Data Forecast, 2025). Emerging real estate markets can be good for your portfolio.
Also read: Real estate investor Abdiweli Hussein pumps $50 million into Tatu City SEZ in Nairobi
#Africas #real #estate #attracts #global #capital