Investors are continuing to demonstrate confidence in the Nigerian economy, despite the slowdown in the economy occasioned by lower oil prices and naira depreciation and the disruptions caused by the general elections earlier in the year, which have all negatively impacted growth.
Nigeria however has attractive numbers which investors find compelling. “A strong demographic profile, an emerging and aspiring middle class with high consumer spending power are some of the market fundamentals that investors find compelling”, explains Ruth Obih, CEO, 3Invest Limited.
Based on these fundamentals, a fresh investment in excess of USD150 million, an equivalent of N29.6 billion has just been made in the retail sector of the economy which in the past four to five years, has seen over N200 billion investment, holding out hope for about 150,000 square metres of retail space.
Resilient Africa, the new investor from South Africa, told BusinessDay that they are in Nigeria to develop as many retail centres as possible, explaining that they have invested the $150 million in the three malls they are developing in the country.
“We have strong confidence in this country and its economy”, said Eddie McDonald, the company’s Chief Operating Officer, in an interview on the sideline of Owerri Mall Tenants Forum in Lagos” McDonald added that this confidence translated into the volume of capital they have invested in their three malls currently under construction, valued in excess of $150 million.
McDonald said they have demonstrated this confidence further, by making sure that there is local content in all their developments. “In our company today, we have some Nigerian shareholders; we partner with some Nigerians to do these developments and that tells you the level of confidence we have in this country; we do our developments in partnership with the local authorities”, he emphasised.
Resilient Africa are the owners of Delta Mall in Warri, which was opened in March this year. They are also the owners of Owerri Mall, on which construction has topped out and will be opened in November this year, and the Asaba Mall which is still under construction, but will be completed in 2016.
Kobus von Biljon, the company’s Chief Financial Officer, said they were excited about their development in Nigeria because of the opportunities they have seen, pointing out that a place like Lagos could take as many as 20 malls, but challenges are there.
“It is a big challenge to build a mall in Nigeria, specifically in Lagos, because of the unavailability of land in the city centre. Again, land value in Lagos is way too high to afford for retail development. If we have to build in Lagos at that high cost of land, the rents will be too high and that will pose a big challenge to prospective tenants”, he noted.
This, McDonald said, was the reason for their choice of second tier cities such as Owerri, Warri and Asaba, adding that the second tier cities were quite accommodating as far as availability of land was concerned, and the proximity of the malls was closer to GRAs than they could be in Lagos, adding that they had their eyes on similar cities like Abeokuta, Oshogbo, Awka, Benin, Oyo and Calabar, among others.
Joham Blom, Retail Portfolio Executive, Boll Nigeria, assured retailers at the Owerri Mall of the right tenants mix that would encourage footfalls in the mall. Shoprite, the retail chain from South Africa, is the anchor tenant, he said, adding that other notable names such as Health Plus, Casa Bella, Kilimanjaro, Da Diva, FEP, snd others have already taken up spaces in the mall.
Owerri Mall, which sits on a large expanse of land along Egbu Road, at the junction close to Imo State University is a joint venture project involving Resilient Africa, Somachi Investments, Terrestrial Real Estate Partners Limited and Median Infrastructure Development Company Limited.
CHUKA UROKO
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