Global Real Estate DealMakers. Ep. 10 – Kofi Asomaning – Accra, Ghana

Kofi Asomaning, a Wharton-educated architect, consultant, and developer, provides in-depth commentary about how his firm, Keystone Real Estate, is taking advantage of advisory and development opportunities within the Ghana market. While COVID-19 has slowed down the timeline of his projects, the country has not been as significantly affected by the pandemic as others and is likely to continue to offer attractive deals across product types. With this said, it is crucial for foreign investors to align with someone local to understand the nuances of land entitlement and permitting, as well as any re-zoning efforts. As a Ghanaian citizen who had stints at major consulting and banking firms prior to starting his own business, Kofi has a comprehensive grasp of the strengths and challenges of the Accra market and other parts of the country.

Dealmaker Highlights

00:00:42 CAREER FOUNDATION: The Ascent of a Dealmaker

• 00:02:22 Kofi’s architectural background laid the groundwork for him to seek his MBA at Wharton and return to Ghana for the pursuit of opportunities in commercial and residential real estate development, investment, and advisory.
• 00:08:14 A 2.5-year tenure at Standard Bank in Accra precluded his involvement with a sub-Saharan fundraising effort alongside Capri Capital and the co-founding of Keystone Real Estate.
• 00:15:18 Keystone’s business model moved from purely architectural work to advisory, design, construction, and procurement functions across the hospitality, office, residential, and mixed-use sectors.

00:20:07 MAKING THE MARKET: A Research Perspective

• 00:20:54 Pre-COVID drivers of Ghana’s economy and how they affect the supply and demand of commercial real estate.
• 00:26:11 Primary providers of debt for real estate projects. A discussion unfolds about the sectors of the Ghana market that command the most capital and the attributes of each.
• 00:29:47 COVID-19 affects in Ghana’s real estate market and daily life in the country
• 00:36:41 The Ghanaian government has responded to COVID-19 with a stimulus package that includes several measures.
• 00:40:56 The likelihood of an abundance of distressed real estate investment opportunities in Ghana is low.
• 00:44:41 Extreme caution in the construction financing market has resulted from COVID-19.
• 00:46:59 Single family residential market pricing segmentation in greater Accra.
• 00:48:16 Kofi discusses the level of domestic and foreign capital in Accra, primarily from Europe (London), the Middle East, and South Africa.
• 00:51:05 Despite “briefcase investors” from Europe and elsewhere looking for 25-30% IRRs, the more realistic returns for development projects in Ghana are in the 18-20% range, with 10-12% cash-on-cash yields.

00:53:07 POLITICIANS AND ATTORNEYS: Red Tape and Bureaucracy

• 00:53:48 With regard to new developments, land can act as a major challenge when it comes to entitlement and permitting. It is expected that migrating to a more online-based process will accelerate project timelines.
• 00:56:01 Re-zoning is a difficult process on paper, but can be circumvented if a project is well-capitalized and the associated parties are savvy. Eminent domain is more likely to take place in the outlying areas of Accra than the center.
• 00:58:54 Foreign investors should take note that land is one of the most important market drivers, which leads to fraud in some instances.
• 01:01:31 Kofi provides an overview of property tax assessment and application, as well as the common ownership interest structures (leasehold vs. fee).

01:04:45 FINANCE AND FORMULAS: The Economics Behind the Deal

• 01:05:10 A 19-unit townhome deal and 7-unit apartment building are keeping Kofi busy as the pandemic continues. He recognizes the need to be thoughtful about the product he is building as it relates to COVID-19’s effects on affordability, costing, and sales timing.

01:12:41 INVESTMENT COMMITTEE Q&A: Real Estate Entrepreneurship

• 01:13:32 The government does not offer much in the way of support to real estate entrepreneurs. Those who are starting should not try to replicate existing projects without fully understanding the math and metrics behind these deals.
• 01:14:57 Areas of major opportunity for entrepreneurs in Ghana include market rate housing, retail, assisted living facilities, student housing, and low-income housing. More individuals are coming into the industry as investors as opposed to developers.
• 01:18:29 PropTech is still in an early stage in Ghana. Expectation is that this will continue to emerge post-COVID.

01:19:28 TOURIST IN YOUR OWN TOWN: How to Spend Three Perfect Days

• In terms of sights to see, Kofi recommends everything from indigenous townships, high-end hotels, beaches, and mountainous areas. However, food is arguably the most appealing aspect of the country for many visitors, inclusive of the popular jollof rice.
• Kofi advises first time visitors to do a lot of research about the country prior to arrival, especially if you are going to travel outside of Accra. Further, one should be cautious about showing signs of money while traveling throughout the region.

Contact Information :

Email: kasomaning@gmail.com
Phone: +233 20 811 54 81
Website: http://keystonegh.com
Instagram: @keystone.real.estate
LinkedIn: https://www.linkedin.com/in/koasomaning

Additional Links:

Kempinski Hotel Accra: https://www.kempinski.com/en/accra/hotel-gold-coast-city
Movenpick Hotel Accra: https://www.movenpick.com/en/africa/ghana/accra/moevenpick-ambassador-hotel-accra/overview
Buka Restaurant: https://bukarestaurant.com
805 Restaurant: https://www.805restaurants.com/our-restaurants/accura
Cape Coast: https://en.wikipedia.org/wiki/Cape_Coast
Kakum National Park: https://en.wikipedia.org/wiki/Kakum_National_Park