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COVID-19 Impacts on Ghana Real Estate

4/16/2020

Elaine Wilson 
Divisional Director Research 

Economy Overview 

The impact of COVID-19 on the economy is projected to present challenging times for the country. Ghana's GDP is expected to decline sharply to 2.6% from the projected 6.8% for the year 2020 with many job losses, reduction in disposable income and economic hardships expected. There has been an increase in the price of commodities as a result of panic buying with borders, schools and offices (except for essential services) being closed until further notice. The Government of Ghana has instituted several social and economic interventions to deal with hardships that may occur amid the pandemic and the police and military have been deployed to ensure compliance with the Government’s directive to stay home, under the tag line #spreadcalmnotfear

 

Retail Overview 

Except for essential goods and services, most retail outlets are closed for business, while those in the fast food industry have had to revert to take-outs and delivery services only. As economic and social activities have slowed down significantly, most tenants and landlords will both experience a significant dip in resources if the situation persists. Rent concessions could be a likely trend in the coming months as landlords and tenants engage on the way forward, dwelling on the 'force majeure' clause found in most tenancy agreements. 

 

Industrial Overview 

Although borders have been closed to human traffic, the ports are still open allowing for import and export of commodities, with human interactions reduced at present. Production of goods have switched to essential commodities such as hand sanitisers instead of alcoholic beverages. The impact on warehousing is yet to be assessed, but due to the upsurge in online sales, the need for stocking up to meet the growing client demands by online retailers and the food and beverage sectors is sure to increase the need for storage and, hence warehousing.  

 

Office Overview 

The demand for office space is set to decline as prospective tenants are also facing the impact of COVID-19 and reviewing business strategy. Occupancy levels may remain the same in the short to medium term within the sector, however, it is too early to speculate the full impact on rents, occupancy and vacancy rates, and business models. It is clear however that serviced offices may face difficulties as many of their clients are linked to short stay expats with business needs. 

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