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Currencies and Rents Commodity Impact on SSA Real Estate

​The fall in oil prices from over USD110/ bbl to below USD30/bbl by January 2016 has had important implication​s for the economies of commodity-exporting markets. Those economies, particularly in developing markets that are struggling to fund state budgets as export earnings dry up, have suffered from major speculative pressure on their local currencies. In turn, this build-up of pressure has had significant repercussions for commercial real estate markets, where leases are quoted in FX terms (typically USD) and in most instances paid in local currency.

In this paper we draw on our experiences in other developing markets with large commodity exposure, notably Russia, to come to some broad conclusions as to what the impact of this dislocation could be for those commercial real estate leasing markets in Sub-Saharan Africa (SSA) that share some similar macroeconomic characteristics and how the complex issues that arise from it might be navigated.

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