High vacancy rate in Apapa Mall underpins deep gridlock impact on businesses
Gradually but steadily, congestion and high traffic volume which, in recent years, define Apapa as a port city, has continued to impact negatively on investments, household income and businesses.
Besides other businesses, the property market in the port city is taking the worst and hardest hit as many of the residential and commercial buildings are now empty. By the last count, it was estimated that 40 percent of buildings in the port city was empty.
A major business enterprise which has more than a fair share of the impact of the gridlock in the port city is the Apapa Shopping Mall which came as a response to the yearning of residents for a modern, world class shopping experience.
The mall is today telling a new story with its high vacancy rate which a new half-year report on the Nigerian real estate market compiled by Northcourt Real Estate estimates at 38 percent. This is one of the highest among about 20 shopping malls surveyed in the three cities of Abuja, Lagos and PH.
Before the mall, developed by Top Services Limited, came, residents and workers in Apapa which was home to an estimated 522,384 people, according to Lagos State government records, had been without a world class retail outlet to serve their shopping and relaxation needs.
Shortly after it opened for business, the shopping mall with 40 retail sales outlets played host to top brands from both within and outside the shores of the country, including Kobis restaurant, Card shop, Daviva, Essenza, Healthplus, Casa Bella, Etisalat, Airtel, Cash N Carry and Busen.
Others were Shoprite, MedPlus, Skye Bank ATM, US Polo, Diva House, Evoke Beauty Salon, Image N Soul, Homely, Suntan and Time Keepers plus such quality retailers as Beerhugz Cafe, Spectranet, Audacious Business Concepts, Filmhouse and Pepstore.
But when BusinessDay visited the retail facility on Monday, it was observed that many of the outlets were empty. Of all the retail outlets upstairs, only one was stocked while the rest were empty. Downstairs, it was discovered that about eight outlets were empty.
“The situation in Apapa Mall simply shows how deep the impact of the traffic congestion in Apapa is. Shoppers avoid the mall because they find it difficult to access the facility whether it is weekend or working days of the week,” Mojeed Olugbenga, an estate manager, explained to BusinessDay.
He noted that many of the retailers have fled and the beneficiary of this exodus is the Adegunsanya Mall in Surulere, also on Lagos Mainland. Unlike Apapa Mall, the vacancy rate here is about 12 percent.
Because of its degraded environment caused by truck drivers and other marine activities, Apapa is no longer attractive for both residence and business. Many residents and businesses have relocated.
This explains why, unlike port cities around the world, Apapa is no longer making the most of its location, especially being one of Africa’s two coastal cities. By virtue of its location, the port city is supposed to be a business hub where businesses flourish with residential and commercial properties in high demand.
Major port cities of the world, including London, Amsterdam, Shanghai in China, Rotterdam in Holland and Singapore are business hubs where thriving business activities lead to increased construction and industrial production, wealth generation, job creation, and high property values.
BusinessDay checks reveal that ports play a substantial role in the economies of metropolitan areas. In Rotterdam, for instance, port-related activities accounted for 74,000 direct jobs and 13 percent of total metropolitan GDP in 2007. In Shanghai, the number of jobs related to port activities reached 840,000 in 2012, up from 347,000 in 2002. Shanghai’s port accounted for 7.6 percent of the city’s GDP in 2012.
Conversely, jobs are being lost in Apapa almost on daily basis. Emmanuel Ameke, a port operator, says the number of jobs that has been lost since Apapa became what it is, over 10 years ago, and how that impacts negatively on Lagos economy can only be left to the imagination.
All these account for the growing vacancy rates in both residential and commercial buildings in the port city. Rotimi Steven, broker at International Estate Partners, says “a significant number of residential properties in Apapa are empty, with vacancy rate well above 50 percent.
“Owners slash rent as much as 60 percent to lure buyers, yet interest is poor; where a property has a price tag of N3 million in Ikeja GRA, the same property struggles to sell for N1 million in Apapa.”
Apapa story simply validates a recent report by PricewaterhouseCoopers (PWC), a consulting and advisory firm, which estimates that Nigeria holds at least $300 billion or as much as $900 billion worth of dead capital in residential and agricultural real estate alone.