Developers and investors are finding data centres an attractive alternate development asset in key markets like Kenya, Nigeria and South Africa, according to Knight Frank’s Boniface Abudho
Data centres are gaining significant traction as an alternative development asset in Africa, giving a boost to the property sector in the continent’s key markets, according to Boniface Abudho, Africa Research Analyst at Knight Frank.
“Data centres are fast emerging as a significant driver of new demand in core powerhouse markets like Kenya, Nigeria and South Africa. Investors, landlords and developers are responding to rising requirements by expanding existing data centres and building high-quality warehouses,” he noted.
A provider of data centre market intelligence services, Abudho said the growing demand for data centres is evidenced by the continent-wide live capacity of 174 megawatts (MW) and a further planned 105MW.
He said in response to the disruption caused by the pandemic, more businesses in Africa have taken their operations online and internet access has become more essential than ever for business continuity.
The major data centre additions in 2021 were in Johannesburg, Lagos and Nairobi. These locations, together with Cairo and Casablanca, are regarded as the top five key data centre markets in Africa, mainly because of their economic potential.
Looking at challenges, the Frank Knight researcher said connectivity pricing is still a deterrent and should continue to drop while energy deficit is critical logistical challenge.
“Africa is still vastly underpowered. Hence, an alternative approach is necessary for a power-hungry industry. An off-grid solution using renewable sources could be a viable long-term solution for the data centre industry,” he said.
