Africa-Press – South-Africa. Pension funds are increasingly financing the Radisson Hotel Group’s South African expansion in key local markets such as Umhlanga, OR Tambo, and Mpumalanga.
Africa’s hotel development pipeline has reached its highest level on record, with 675 hotels and resorts totalling 123,846 rooms currently under development, up 18.6% year-on-year.
The growth is underpinned by an 8% rise in international tourist arrivals in 2025, the strongest of any region globally, with the continent welcoming approximately 81 million visitors according to UN Tourism.
In Southern and Eastern Africa, the development story is being written by a less obvious cast of investors, explained Radisson Hotel Group’s senior director of development for Southern and Eastern Africa, Daniel Trappler.
“We’re not seeing global capital flowing into African hospitality,” he said. “Investment in this region is driven by local and national players, within their own countries.”
He explained that, in this region, local capital is increasingly coming from pension funds rather than private individuals.
“The investor landscape has moved more towards pension funds and institutional money, which is only equity and no debt,” Trappler said. The alignment is practical.
Hotel investment requires patient capital, and pension funds, mandated to generate long-term returns for their members, have both the time horizon and the need for yield that hotel assets can provide once stabilised.
This shift also reflects a broader trend documented across the Southern African Development Community.
Sustainability, diversification and high risk-adjusted returns are among the most important investment objectives for pension funds in the region.
This was revealed in research commissioned by Financial Sector Deepening Africa and the Southern African Venture Capital and Private Equity Association, conducted by Intellidex.
Alternative assets, including private equity and private debt, are increasingly being recognised as viable vehicles to meet those objectives.
How the Radisson is funding its South African expansion
Radisson Collection Hotel, Waterfront Cape Town
Most pension funds in Southern Africa are confirming that their investment policies already allow for allocation to alternative asset classes.
Hotel development, as a long-duration real asset with predictable income once stabilised, fits within that framework, and pension fund investment in the sector is gaining traction.
In South Africa, the Municipal Employees Pension Fund owns and operates a hotel at OR Tambo International Airport.
It is also developing a second property in Mpumalanga, due to open later this year. All are partnered with Radisson Hotel Group. The hotel giant also has even more developments in the pipeline for South Africa.
New signings include Radisson Serviced Apartments Umhlanga, a 155-room extended-stay property planned for 2029 within Umhlanga Ridge, one of Durban’s most established commercial and lifestyle hubs.
The group said this reflects a growing demand for high-quality branded accommodation in South Africa’s secondary city markets.
Radisson Hotel Group has reached a significant milestone on the continent, with more than 100 hotels in operation and under development across Africa.
“We are at an inflexion point,” Trappler added. “The capital is here, the demand is here, and the development is happening. Africa’s hospitality story is no longer one of potential. It is one of progress.”
African hotel boom
Radisson Blu Mosi-oa-Tunya Livingstone Resort, Zambia
Pension fund investments in hotels are also popping up in other African markets. Tanzania’s National Social Security Fund is currently developing two hotels in the country.
In Zambia, the National Pension Scheme Authority owns an operating property in Livingstone.
East Africa is currently leading the continent in construction momentum, with Kenya, Ethiopia and Tanzania each having close to 80% of their planned hotel rooms already under construction.
“This is a significantly higher actualisation rate than the continental average and a sign that announced projects in the region are moving from paper to reality faster than elsewhere,” Trappler said.
Specific markets within Africa present distinct investment cases. In Zimbabwe’s capital, Harare, the absence of internationally branded hotels with dedicated conference and events facilities is creating demand.
Established investors are beginning to recognise this gap. “Pension funds in the country are sitting on significant capital and looking to deploy it, and the gap in Harare’s hotel market is becoming increasingly visible to them,” he said.
Radisson Hotel Group has signed a property in the city. Victoria Falls draws on leisure and MICE demand, with the group’s Park Inn by Radisson resort currently under development there.
Bulawayo, Zimbabwe’s second city, is a third market the group is actively considering, where regional business travellers and cross-border traders are currently underserved by existing accommodation options.
Zanzibar is also drawing attention as a priority resort market, reflecting broader investor interest in Indian Ocean leisure destinations.
Trappler also pointed to Tanzania, alongside Kenya and Morocco, as markets likely to see the most significant hospitality investment activity over the next three to five years.
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