The Sub-Sahara Africa region has big potential in its hotels market, particularly as economic conditions are favourable in a range of nations, two firms teaming up in this area say.

Global alternative asset management house Duet Group has partnered with part of French construction and services conglomerate Bouygues Construction Group to build and manage a range of hotels across Sub-Saharan Africa, aiming to exploit what are seen as under-developed markets for such facilities.

Duet has signed the agreement with Bouygues Batiment International to establish Duet Africa Hotels. The entity is a “vertically integrated hotel investment, development and asset management company”. Duet Africa Hotels will develop, design, build, own, operate and exit a portfolio of internationally branded midscale and upscale business hotels, it said. The venture will target countries such as Nigeria, Ghana, Ivory Coast, Ethiopia, Tanzania, Mozambique, Kenya and Uganda. The focus will be on greenfield developments or significant refurbishments in standalone or mixed use format with office, residential and retail, Duet said in a statement.

The agreement suggests that Africa, while a region that often attracts negative headlines from the global media, is also seen as a fast-growth region with the emergence of an affluent middle class in some countries – a fact that hasn’t been lost on the wealth management industry. (To see a commentary on this point, click here and here.)

The Sub-Saharan region has posted economic growth of greater than 5 per cent per year recently; there is favourable demand for hotels, a lack of supply and relatively high barriers to entry, the firms said.

“Currently there are only an estimated 84,000 branded hotel rooms in Africa with the majority in North Africa and South Africa. Moreover, hotels in the pipeline are typically subject to long gestation periods due to funding issues and poor execution capabilities with 62 per cent of the hotel rooms reported to open in 2015 not yet on site,” the statement said.

Jean-Marc Grosfort, the former chief development officer for Middle East and Africa for Marriott International, will be the non-executive chairman of Duet Africa Hotels.

Duet Group has more than $5.5 billion of assets under management and it has offices in London, New York, Dubai, New Delhi and Accra.