- Title
- A framework of macroeconomic factors to be considered when evaluating commercial real estate development in sub-Saharan Africa
- Creator
- Lawson, Stephen
- Subject
- Commercial real estate -- Development -- Sub-Saharan Africa
- Subject
- Real estate investment -- Sub-Saharan Africa Macroeconomics
- Date Issued
- 2019
- Date
- 2019
- Type
- Thesis
- Type
- Masters
- Type
- MBA
- Identifier
- http://hdl.handle.net/10948/40072
- Identifier
- vital:35745
- Description
- Sub-Saharan Africa as a region is one with great potential given the positive demographic trends experienced in recent history, trends expected to continue into the future. The factors contributing to this positive demographic trend include, improved healthcare, education and life expectancy, all of which have contributed to a younger and growing population. The younger and growing population, the majority of which are located within the working age group, have resulted in high rates of urbanisation as the populous move from traditional rural areas to more urbanised areas and cities in search of greater opportunities, employment, and ultimately, better quality of life. The positive population growth and urbanisation trends exhibited in the region provide an opportunity to the role players in industry and commerce, as they seek to take advantage of the growing consumer base. Accordingly, commercial real estate developers active within the region have an opportunity to satisfy the growing needs of the market given the low levels of commercial real estate stock available in the region. However, historically the region has served as a poor investment destination for commercial real estate given the dynamic and occasionally volatile political, economic and legal environments. The opportunity presented to commercial real estate developers as a result of the positive demographic trends is met with large scale risks in the form of a dynamic and ever-changing macroeconomic environment within the region. To ensure the success, profitability and longevity of their commercial real estate developments, active real estate developers and in pursuit of commercial real estate development in sub-Saharan Africa need to approach the opportunities in a cautious and informed manner. The purpose of the study is to develop a framework which will identify a common set of macroeconomic factors and associated variables in order to assist South African real estate developers in the identification, mitigation and management of macroeconomic risks when evaluating commercial real estate in sub- Saharan Africa. A frame of reference was developed on the PESTEL Analysis in order to identify factors within the macroeconomic environment, following which a literature-driven framework was developed after an extensive literature review process, which identified macroeconomic risk variables associated with each of the factors identified. The literature-driven framework was then tested through a series of semi-structured interviews, which comprised five suitably qualified and experienced respondents who are real estate developers currently active in pursuit of commercial real estate development in sub-Saharan Africa and are currently employed by or own a real estate development organisation. Following the data analysis of the respondent interviews, a proposed framework was developed which detailed the macroeconomic factors and associated variables to be considered when evaluating commercial real estate development in sub-Saharan Africa, by providing a ranked scale of relevance for the variables associated with the respective macroeconomic risk factors identified. The development of the proposed framework is intended to assist South African real estate developers in the identification, mitigation and management of macroeconomic risks when evaluating the development of commercial real estate in sub-Saharan Africa.
- Format
- 439 leaves
- Format
- Publisher
- Nelson Mandela University
- Publisher
- Faculty of Business and Economic Sciences
- Language
- English
- Rights
- Nelson Mandela University
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