Kuwait-listed Agility, which had a turnover of $5.1bn in 2018, has entered phase 5 (out of 7) of the development of its Ghana warehouses (100,000m² at the end of the project).
Now it is preparing to open parks in Maputo (175,000m²) in July, in Abidjan (280,000m² on the PK24 industrial zone) in October, and in Lagos in November, according to The Africa Report.
Agility’s strategy is to place its logistics parks on the outskirts of large cities on the continent, on the busiest trunk roads and outside congested port enclaves.
“In Africa, containers stay too long in terminals that do not have a storage vocation,” says Paul Tourret, director of the Higher Institute of Maritime Economics.
Once developed, the projects will be worth $150m each, according to Geoffrey White, Agility’s CEO for Africa, who wants to expand Agility’s portfolio quickly by launching projects in the DRC, Angola, Tanzania, Uganda, Ethiopia and Kenya as early as 2020.
In Kenya, other players, such as Africa Logistics Properties (ALP, in which CDC Group is a shareholder) and Improvon (supported by Actis), are already developing similar projects.
According to Knight Frank Africa, the demand for storage has been stimulated by the arrival in Kenya of the distributors ShopRite and Carrefour, which had suffered from inadequate and unsophisticated storage capacities.
According to Toby Selman, CEO of ALP, the parks have a rate of return of 8.5% while office real estate has fallen from 11% in three years to 8%, and residential real estate has reached a ceiling of 5.6%.While the demand is there and Agility easily self-finances its projects, their implementation is hampered by bureaucracy and low land availability. “It takes twice as long to build a warehouse in Africa as elsewhere,” says Agility’s White.