Emerging Real Estate Investment Opportunities In Africa: The Case Of Tanzania

Over the last two decades a number of African countries have been implementing large structural adjustments which have significantly improved the investment environment in the continent. Nevertheless, very limited literature about African investment market exists and, this has substantially contributed to a poor inflow of international capital. Using the case of Tanzania, this paper looks into real estate investment opportunities available for European institutional investors. Tanzania being one of the African countries has similarly over the last 20 years been engaged in major structural reforms. Among the outcomes of the reforms is a noticeable evolution in real estate investment market. Institutional investors have substantially rebalanced their portfolios in favour of real estate assets. Currently, pension and insurance institutions` allocation to real estate is more than 30%. There have also been major changes to real estate related legislation to accommodate more forms of investment. Many other laws have been enacted and some amended to attract and protect foreign investors. This paper dwells on major initiatives that have enhanced investment opportunities in the real estate sector. Various economic trends incidental to the evolution of real estate market over the past 20 years are also considered in this paper. Results show that, despite the existence of clear investment prospects in real estate, this sector still accounts for less than 10% of the Foreign Direct Investment (FDI) into Tanzania. Among others, it is thus recommended that European real estate investors start considering Africa as an option for international diversification.