Dual currency real estate funding, may solve headaches in sub-Saharan Africa

While property sector trends in West Africa are still positive, the main challenge has been currency volatility and related regulations, said Adeniyi Adeleye, Head of Real Estate Finance for West Africa at Stanbic IBTC.

Dual currency funding structures can bring stability and robustness to real estate deals in sub-Saharan Africa, as developers and retailers seek solutions to the volatility currently faced in their domestic economies.

Traditionally, most property development projects are financed in dollars to assist in creating a sustainable and predictable funding environment for the assets.

While property sector trends in West Africa are still positive, the main challenge has been currency volatility and related regulations, said Adeniyi Adeleye, Head of Real Estate Finance for West Africa at Stanbic IBTC.

“This has exposed tenants to rental increases because their rents are indexed to dollars. The devaluation of currencies in countries like Nigeria and Ghana has been quite significant,” he said.

Over time, these cost increases will inevitably be passed on to consumers, which will in turn create additional... TO GET THE FULL STORY, CLICK HERE FOR MORE