Living in East Africa certainly has its challenges. Some even consider our problems – escalating land prices, the high number of slum dwellers and the much-lamented youth bulge – signs of certain disaster. But for the real estate industry, all these signal unique and historic opportunities. 

Take economic growth. With more than 120 million people, East Africa boasts one of the largest single-bloc regional markets in Africa. The private sector finally unleashed, our region is transforming from an agricultural into a service economy, with telecommunications, finance, transport and business services at the forefront.

Even in the throes of the global financial crisis and upheaval in Kenya, the greater Eastern Africa, including Ethiopia and Sudan, led economic growth in Africa at an average of 7.3 per cent in 2008, down from an unprecedented 8.8 per cent in 2007. Although this strong regional growth is expected to slow somewhat in 2009 and 2010, the positive trend is likely to resume. Then, urbanization. In 2005, our cities’ populations were growing at 5 percent, more than twice the global average of about 2 percent. This is only the beginning. East Africa is on the cusp of a dramatic shift in human settlement, with its urban population to double in the ten years between 2007 and 2017.

Finally, the youth bulge. High fertility rates in the past have meant that today, over half of East Africa’s current population (some 53 million people) are children below 16 years of age. Kenya for example, has 103 non-working-age citizens for every 100 working-age citizens. By contrast, the United States, Japan, and Sweden have roughly two working-age people for every non-working-age person.

Each of these factors – economic growth, urbanization and burgeoning youth – are good news for the property industry. Economic growth generates jobs and higher incomes. Urbanization drives settlement in cities and suburbs and young people create families and form households. This drives increased demand for urban homes, offices, retail facilities and municipal amenities. That’s why investors worldwide are taking a greater interest in Africa and in urban real estate and infrastructure in particular.

But our regional building industry has developed bad habits over several decades and is ill-prepared to benefit from the dramatic expansion to come. Instead, we are at risk of being eclipsed by the challenge of more nimble, sophisticated competitors landing on our shores.  Our professionals, from architects and engineers to lawyers and brokers, need to upgrade their ethical standards and deepen and globalize their technical skills to handle larger, more complex transactions. Investors must learn how to analyze opportunities and negotiate deals in competitive capital markets. Financiers need to manage rather than avoid risk, spot market gaps and lead rather than follow. Contractors and suppliers must employ systems, processes and technologies to streamline their supply chain and deliver projects on time, under budget and to specification. Policy-makers and regulators must embrace their role in facilitating efficient land markets and ensuring fair play.

All these groups must appreciate urban dynamics, capital markets and project management as they relate specifically to real estate. But in addition, all of us, including private developers and investment clubs, must transform our businesses to compete with the best of our global peers. We must equip our executives with skills and strategies in leadership, ethics, change management, negotiation and succession planning. Only then can we position ourselves to be at the forefront rather than the sidelines of the property boom to come.

Laila Macharia is the principal of Scion Real, a private equity and advisory firm focused on real estate. www.scionreal.com.