Does investing in commercial real estate in Dakar seem like a bold move to you? The capital is undergoing a transformation, with foot traffic increasing in business districts and along major thoroughfares. Today, professionals are looking for spaces to set up shop or expand their businesses. Want to know if this is a good idea? The answer is yes—provided you choose your location carefully, understand the legal framework, and plan for the costs. Our article provides a clear, fact-based overview tailored to the Senegalese market.
Why is investing in commercial real estate in Dakar such a game-changer?
For several years now, brick-and-mortar retail in Dakar has been booming. Local and international retailers are seeking well-located spaces. Pharmacies, medical offices, showrooms, and service centers occupy ground-floor spaces in high-traffic areas.
Today, Dakar is a metropolis where people and economic activity converge. Major thoroughfares such as Bourguiba Avenue, Mermoz, Sacré Coeur, Liberté, and Point-E attract investors. These areas have become places where businesses can quickly find customers and stable tenants. In general, the vacancy period for commercial spaces is shorter than for rental apartments. This means that your commercial space can generate regular income more quickly if you choose the right location. Yields on commercial properties in Dakar can range from 7% to 12% in strategic locations, and even higher for shopping centers or highly visible spots.
A well-located business allows you to attract a steady stream of customers and negotiate longer leases with your tenants. This is an advantage over traditional residential real estate.
Return on Investment, Taxation, and Commercial Leases: What Senegalese Law Says
In Senegal, tax law is clear under Article 201. As the owner of a business:
- You pay an annual property tax called the Contribution Foncière des Propriétaires Bâties (CFPB), at a rate of 5% of the property’s rental value,
- Rental income is subject to property tax, after deducting expenses allowed by law, with a possible flat-rate deduction of 30 percent, followed by taxation according to a progressive tax scale,
- At the time of purchase, registration fees are set at 5 percent, payable in full , and are calculated based on the stated price,
- The property is subject to the household waste tax (TEOM), set at 3.6% for properties located in Dakar,
- If the premises are rented for business use or are furnished, the rent may be subject to VAT at a rate of 15%.
To find out about all the tax obligations you may have, don’t hesitate to consult a real estate professional or a specialized accountant.
When renting out a property, it is strongly recommended that you draw up a commercial lease. In Senegal, this contract is governed bythe Uniform Act ofOHADA (Organization for the Harmonization of Business Law in Africa). This legislation protects both the tenant and the landlord while establishing clear rules, such as the possibility of a verbal agreement. As mentioned earlier, we recommend that you draw up a written lease agreement.
A tenant who operates a business may be entitled to a lease renewal after operating the business in good standing. This is reassuring for you as an investor if you are seeking income stability.
Mixed-Use Residential Developments and Commercial Visibility: When Real Estate Creates New Uses
Mixed-use residential buildings with retail spaces on the ground floor are becoming increasingly popular. These spaces combine residential living with a vibrant commercial atmosphere. They attract professional tenants who want to be close to their clients. At REALITES SENEGAL, we design most of our residential complexes to include retail spaces.
A commercial space on Bourguiba Avenue
At Amitié 1, within the Astyn residential complex, two ground-floor commercial units—measuring 145.45 m² and 138.25 m² respectively, each with a mezzanine—meet this demand. These spaces are ideal for showrooms, service areas, or professional offices.
The Point-E neighborhood, a strategic location
In the prestigious Point-E neighborhood, the upscale Douta Seck residential complex offers a 314.85 m² unit on the ground floor. A space of this size allows for greater flexibility in how it can be used, such as for:
- A large store,
- A coworking space,
- Or for a consultation room.
Layouts that take advantage of a vibrant residential setting, maximum visibility, and a natural flow of customers.
Our real estate developments show that incorporating commercial space into a modern residential building is more than just a trend—it’s a direct response to the current needs of professionals and businesses. Such spaces often have greater rental appeal than standalone commercial properties.
Commercial Space or Apartment: Two Complementary Wealth-Building Strategies
A commercial property isn’t necessarily a substitute for an apartment. These are two different investment strategies that align with your wealth-building goals. An apartment is often more affordable and stable. It meets strong rental demand in urban areas. It’s easy to manage and well understood by individual investors.
Commercial property can generate higher rental returns and longer leases with commercial tenants. It is better suited for investors who want to diversify their portfolio and generate more robust income.
Many investors today combine the two. They keep an apartment to build their asset base and invest in commercial property for returns and diversification.
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Is it a good or bad idea to invest in commercial real estate in Senegal?
The answer is a resounding yes! If you’re considering investing in commercial real estate in Dakar, it’s currently a solid opportunity for anyone who understands the real estate market. Urban commerce is rebounding, foot traffic is increasing, and well-located spaces are attracting stable tenants. The tax system is straightforward, but it must be factored into your strategy. Finally, mixed-use developments are proving to be effective ways to maximize visibility and returns.
At REALITES SENEGAL, we provide support for all your real estate projects, whether they involve an apartment or a commercial unit.
Should we talk about it?