Senegal

Diamniadio poised to unlock new office demand

The UN's relocation of 2,400 staff to a new US$ 300 million regional HQ at Diamniadio, approximately 30km from Dakar, could be a ‘game-changer for the country’s office market. There is limited office development activity in Dakar, with Sertem's Tour des Mamelles (48,000 sqm) north of the peninsula being the principal Grade A pipeline availability.

The potential impact of the proposed CBD at Diamniadio on the market is yet to be fully realised, and the UN's decision to relocate from Dakar could catalyse further corporate relocations.

Weak demand for new retail developments

The retail landscape in Dakar is characterised by a minimal supply of malls, with Teyliom's Sea Plaza (16,500 sqm), anchored by Casino and developed over a decade ago, remaining the city's sole major upmarket retail destination. Compared to cities like Abidjan in Côte d'Ivoire, Dakar's retail market is notably underdeveloped, as evidenced by the absence of further mall developments similar to Sea Plaza, highlighting the relatively weak demand.

Despite this, there has been notable activity in the supermarket sector. Spanish retailer Dia established a chain of small supermarkets, subsequently acquired by French retailer Auchan in 2017, expanding from nine units to nearly 30 outlets. Carrefour entered the Dakar market in 2019, albeit with only one unit of 8,600 sqm in Point E. However, protests by local retailers against the presence of French businesses in the market may serve as a deterrent to further expansion.

New US$ 1bn deep-water port could boost the industrial sector

Much of Dakar's industrial activity is concentrated around the port area, where older more secondary stock dominates. Congestion, primarily due to the high volume of trucks transporting containers from the port to processing hubs, is cited as a regular challenge by occupiers.

All however does appear set to change. Dubai's DP World is constructing a US$ 1bn deep-water port 50km south of Dakar. This project is expected to support economic growth, complementing the country's rapidly expanding oil and gas sector. The investment by DP World builds on the UAE’s position as the largest investor in Africa. Indeed, the Emirates committed to US$ 44.5bn in African investments last year.

Despite this positivity, the current instability in Mali and Burkina Faso, along with the exit of these countries (and Niger) from the ECOWAS trading bloc, could potentially disrupt these plans. One of the key motivations behind the deep-water port development is the ability to serve these markets, and instability in the region may pose challenges to the project's objectives.

Rising residential development activity

There has been a notable surge in residential development across Dakar from the start of 2024. At the higher end of the market, a substantial portion of this development comprises apartments from Plateau in the south of the peninsula through to Mermoz and Les Almadies.

This rise in activity is in stark contrast to 2023, which was punctuated by the stalling of several projects. The slowdown in construction activity was linked to escalating construction costs, financing challenges, and some apprehension by developers around the risk of an oversupply of housing.