The Future Of Proptech in Africa: Predictions and Trends

For a large majority, real estate is one of the most important considerations in life.  People need property to house themselves, and their families over the course of a lifetime. Similarly, businesses need the right location/space (at the right price) to operate efficiently and develop effectively. Real estate is also a tried and tested avenue for investment. As such, millions of people around the world need assistance in various aspects of real estate including; searching for property, managing real estate transactions and managing properties. It is such needs that have fueled the exciting rise of PropTech companies like Seso Global. PropTech (Property Technology) is the use of technology to help individuals and businesses research, buy, sell and manage real estate or property. With this in mind, it’s easy to agree that Proptech will continue to shape the Real Estate industry, especially in emerging markets. Below are some of the key predictions and future trends in Proptech in Ghana and Nigeria.  

Smart Buildings

In more technologically advanced countries, residential and commercial properties are becoming more than just static spaces. These new ‘smart buildings’ feature the installation and use of advanced, integrated building technology systems that allow more automation, interaction and control for those who live in them. These systems include automation to control lighting, temperature, humidity, and other parameters for personalized comfort, automation of safety and security controls, telecommunications, preventative maintenance , and facility management systems. As African countries get more advanced in ICT integration, real estate developers will be encouraged to include smart features in their properties to meet the changing needs of customers and investors. 

Property Financing Solutions

Research shows that financing options for real estate developers in Africa require extensive collateral and come with crushing interest rates. Furthermore, any financing for development is cash intensive and dependent on volatile exchange rates and inflation trends. However, in recent times, there have been increasing efforts to provide flexible financing opportunities for property developers and investors in Africa. These largely private sector efforts have also been accompanied by public sector reforms and support to enhance the real estate ecosystem. Propcrowdy, is an inclusionary crowdfunding investment platform that seeks to empower property developers by providing them channels of funding for their respective property developments. Additionally, it allows working class individuals to access verified real estate investment opportunities that match their incomes. Recently, Propcrowdy, has been licensed by Nigeria’s Securities and Exchange Commission (SEC) as a crowdfunding intermediary (CFI) company. With this, Propcrowdy became the first and only platform in Nigeria today authorized to perform crowdfunding business under the rules and guidelines of the SEC. The SEC license to Propcrowdy further gives credence to crowdfunding as a viable alternative investment vehicle for property in Nigeria. Other African proptech companies that are connecting property developers with investors include, Cofundi, Crowdprop and Africa Land Developers. 

Growth in Property Payment and Rental Proptechs 

On the real estate consumer side, there has been an increase in the number of protech companies that seek to support individuals in managing property payments including rent, mortgages and fees. Rent Small Small started in 2018 and provides people with the opportunity for monthly rental payments, which is in sync with the wage system in Nigeria. Spleet is another one of such proptech companies that connects landlords with vetted tenants looking for flexible rent payment options.  

Prop Tech VC’s in Africa

Global tech accelerators are moving into African PropTech with purpose. MetaProp’s accelerator has signed up Estate Intel and Spleet. Rent Small Small gained investment from Techstars Toronto, while Red Swan CRE got accepted into Aldar’s VC program. ARM Labs’ Techstars Accelerator program has recently launched in Lagos with the intention of investing in early-stage FinTech & PropTech companies based in Africa. Up to 12 startups will be selected on an annual basis, and will have access to their vast network. MEST, through its Pan-African tech incubator and hub, and PropLab.Africa (Nigeria) through its development and investment programme for proptech start-ups, are platforms that are developing necessary eco-systems for the sector to grow in Africa. The African property market seems destined to grow fast and VC’s are increasingly interested in getting in at the ground floor to facilitate and ultimately leverage the industry’s growth potential. 

Property Blockchain Systems

Blockchain technology is a technology used in diverse capacities today that will shape the future of African real estate in the near future. In Ghana, a significant proportion of land market activity remains unknown and uncaptured. Where tenure is documented, registration is often completed through centralized, paper-based processes, which are cumbersome and rife with corruption. Blockchain technology is a system of recording information in a way that makes it difficult or impossible to change or hack. The availability of immutable registries built with Blockchain Technology has the potential to positively transform the real estate industries in emerging African markets by increasing transparency and security. Seso Global’s blockchain based land registry has been utilized in South Africa to record 22,000+ homes and is the first working example of a blockchain-based property registry in South Africa. Seso Global is also using its unique blockchain solution to support the Ga-Dangme Land Administration in modernizing customary land records and administration in the Greater Accra Region of Ghana.

Africa is a continent that is showing immense potential for socio-economic and demographic growth. Consequently, real estate companies and investors need to find sustainable and innovative ways to meet the growing needs of the market in order to be successful. Furthermore, as conditions change, consumers will require effective tools to navigate the dynamic real estate market. Undoubtedly, proptech is a major component that will serve both real estate businesses and consumers and allow them to maximize positive outcomes in the industry.