The continent of Africa is currently home to 1.2 billion people; the U.N. estimates that number will double to 2.4 billion by 2050.
Cities like Nairobi and Lagos are already infamously crowded and overwhelmed by their current populations. Where will all the additional people go?
Rendeavour, an urban developer backed by U.S. and international investors, is betting that some of them will choose to live in satellite cities outside the crush of city centers.
With seven projects in five countries – Kenya, Ghana, Nigeria, Zambia and the Democratic Republic of Congo – Rendeavour, a private investor, is working with local governments, developers and communities to create new cities in some of the most overpopulated areas in the world.
Preston Mendenhall, Rendeavour’s Head of Corporate Affairs, recently spoke to OnFrontiers about how they are scaling their projects from Accra to Lubumbashi.
Read excerpts from the interview below.
How did Rendeavour start?
Rendeavour has its roots in Central and Eastern Europe. Stephen Jennings, Rendeavour’s founder and a pioneering investor in those regions since the early 1990s, expanded the business to Africa in 2005 and began to focus on developing land near booming metropolises into communities and satellite cities that are near enough to city centers, but far enough away that they can provide people with what we call a “live, work, play environment.”
The business was born out of the trends in urbanization and demographic growth in Africa. It is the fastest urbanizing continent in the world and has the fastest growing population as well.
Are the developments targeted toward sub-Saharan Africa’s burgeoning middle class?
All the developments we’re building are mixed-use and mixed-income. What that means is that each one of the projects has residential, commercial, retail, logistics and light industrial areas, as well as social amenities like parks, schools and healthcare facilities. The average Rendeavour project, which is generally 2,500 acres (1,000 hectares) in size, is built out in phases over 20 years. When each project reaches maturity, we expect to have about 100,000 people living there.
Of that 100,000 people, our analysis shows that about 15% will be lower-income, living in affordable housing; and 15% will be high income, living in gated communities within the overall development. But it’s really the remaining 70% that will be the core residents of the projects, and they are middle class/middle income people.
How is Rendeavour replicating/scaling the project from one country to another? Since Kenya versus Democratic Republic of Congo seem like very different markets?
They are different markets. We’ve learned that we need to be flexible and we need to be led by the market. So the kind of housing and commercial buildings that you’d start with in Lubumbashi, DRC, will be different from what you start with at some of the other projects.
So being able to react to what the local market needs, means we need to have strong and experienced teams on the ground. That is essential to building across a variety of markets simultaneously.
In terms of scaling, we are able to use group human resources across several projects. For example, we have a head of construction who looks at all the different prospects at once and can find economies of scale in the infrastructure and build out.
What are the basic tools you use to get up to speed in each new market?
We like to have good local partners. It’s sounds like a cliché – but its extremely important in these markets.
We also need to have the right team in place – which is a combination of local and international expertise.
After a couple projects, we’ve now gained the experience of being able to identify the right kind of land, location and partners.
But before we go ahead with a project, we have to interact with governments to understand what the national master plan for infrastructure is. We need to know where the roads are going to be built, where power is going to be extended. Ideally you work very closely with the government to be in those areas and to coordinate with them.
What are your the best practices for finding local experts and tapping into them?
We generally have a lot of luck with returning diaspora. Because of the economic opportunities in Africa, there are very, very capable Africans who are returning home after 10 years of work in places like London and New York.
So we have African engineers, charted surveyors who have their qualifications from the U.K. and U.S. We have senior managers in our markets who spent 10 years working for big law firms in New York. We find a great combination of local and international expertise through returning diaspora.
How do you create your networks of experts and people you work with in each new country you go to?
We have a very consistent process of explaining to all stakeholders what we are doing and what the benefits are.
Essentially, what we are doing, it’s hard to find fault with it. We are a private investor that is coming in and investing in infrastructure – we’re not asking the government for money. We’re building homes – in all the countries we are working in there are massive housing deficits. For example, in Kenya, there is a housing deficit of 2 million units and that grows by 200,000 per year. So we’re building houses. And through the process of a 20-year phase development, we’re creating tens of thousands of jobs.
So we find that the best way to manage stakeholders and build networks is to let people know what we are doing and the kind of economic opportunities that we are bringing to a country.
Also, we’re a different kind of international investor in that we are not in an extractive industry. We’re not taking something out of the country.
We’re coming in and building infrastructure, homes and a platform for economic development – and leaving it there. And who is going to live in these places? Kenyans, Nigerians, Congolese. They are the end owners of our projects.
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