Africa’s fledgling hotel sector is expected to attract $7.2 bn (€6.4 bn) of global capital over the next three years as its markets become more established, says JLL.

Africa’s fledgling hotel sector is expected to attract $7.2 bn (€6.4 bn) of global capital over the next three years as its markets become more established, says JLL.

Expanding economies, rapid urbanisation, a growing middle class and rich resources in a region with a population of 1.1 billion are making the continent increasingly attractive to inward investors, according to a report, Spotlight on Africa: Opportunity on the Horizon.

JLL expects $2.1 bn to be invested in African hotels in 2015, rising to $2.4 bn next year and $2.7 bn in 2017. Tourist numbers are projected to increase by 5.7% annually to 2030, compared to 3.2% globally, while hotel demand is set to grow by 5% per year between 2015 and 2017. However, there is considerable discrepancy between countries, with some on a higher growth trajectory while others are contracting.

Investment is driven by local and regional players who account for at least 75% of hotel investment in the region, JLL notes. Currently 46% of investors are pursuing hotel developments, while 17% are looking only at acquisitions, while 37% are seeking both.

JLL’s report was based on a survey of 50 investment companies.

'Local and regional investors currently dominate hotel investment and ownership in Africa,’ said Xander Nijnens, senior vice-president, JLL Hotels & Hospitality Group, Sub-Saharan Africa.

'However, global brands are playing an important role in increasing the visibility and quality of hotel real estate and global capital is increasingly taking note of the opportunity and is assessing its optimal entry point.

'In the long-term there is little doubt that Africa will be a meaningful player in the global real estate economy. The next several years will see a significant evolution in the hotel real estate landscape in Africa and we anticipate that global capital will flow into the sector as and when the right opportunities arise.'