The new shopping experience which is becoming a common feature of life in the major cities of Nigeria following massive investment in retail development in those cities are gradually but steadily spreading out as investors are, increasingly, focusing on state capitals and/or ‘second tier’ cities.
Both local and international investors in retail outlets see opportunities in those ‘small markets’ where there is large but unmet demand which is why there are either completed or on-going shopping mall development projects in such second tier cities as Enugu, Onitsha, Aba, Asaba, Kano, Owerri, Ilorin, etc.
One of such investors is Grand Towers Property Fund which says it is capitalising on the huge, pent-up demand for quality retail space from Nigeria’s emerging middle class, fuelled by a fast-growing aspirant population with considerable buying power, rapid urbanisation and improved infrastructure, Grand Towers Property Fund to invest in retail and mixed-use developments with multi-national anchors in state capitals or ‘second-tier’ cities of Nigeria.
Registered in Mauritius, the Grand Towers Group developed the first Shoprite-anchored mall in Abuja and the Grand Towers Abuja Hotel which was commissioned in March 2013.
“We are partnering with Shoprite – which has planned a massive rollout of 50-60 malls in Nigeria—and other multi-national tenants seeking access to this unserviced market in the development of further malls in Africa”, Peter Collins, CEO of Grand Towers, disclosed in Lagos recently.
Continuing, Collins said, “the next cities earmarked for the launch of Shoprite-anchored malls – comprising over 24 000 square metres (sqm) are in the state capitals of Minna in Niger State, Port Harcourt, in the hub of the country’s oil industry in Rivers State and Ekiti, the capital of Ado-Ekiti .
According to him, these would be the first Shoprite stores in these cities, explaining that in Minna, the new 8,244sqm mall will be centrally located in the centre of town, in Port Harcourt a mall of 8,100sqm is well positioned on the airport road, while in Ekiti, a mall comprising 7,700sqm will be situated on the University Road, about 2000m from the centre of town, and the Shoprite stores within these malls will comprise 2800sqm, 3000sqm and 2500sqm respectively.
The rapidly changing Nigerian retail landscape, said to be the third largest contributor to GDP, is experiencing burgeoning growth, steadily evolving from a large-scale informal sector toward formal spaces, encouraged by state government in an effort not only to provide better living conditions and quality of life for citizens but also to improve the standard of products and diversify the economy.
Collins reasoned that this growth was underpinned by a strong demand among a young and increasingly savvy urban population for high quality, stress-free retail environments and a modern vibrant shopping experience which includes leading international brands.
“This has prompted multi-national developers to seek land to develop malls anchored by South African retailers, thereby creating nodes of development in major metropolitan areas”, he said.
“Partnering with the best in African property professionals to deliver quality, the fund offers a sound investment opportunity for those seeking exposure to the biggest retail explosion in decades in Africa’s largest economy. With some 180 million consumers in Nigeria – expected to grow to 211 million by the year 2020, the demand from a growing middle class for quality space is unprecedented, he noted.
He disclosed further that Grand Towers has access to these land portions in high-demand locations ideal for multi-national tenants and provides a secure vehicle to achieve excellent risk-adjusted returns from this market, achieving liquidity in year three, and with a five-year exit into a listing or directly to real estate investment trusts (REITs).
“Initially, our primary focus was on West Africa and Nigeria specifically, with sites already secured in Abuja, Lagos, Jos, Kalaba and Kaduna, which are in various stages of preparation for development – flowing from Shoprite’s targeted list of stores in these states. We will also diversify into properties in East and Sub-Saharan Africa, with sites being identified in Democratic Republic of the Congo, Kenya and Ghana,” says Collins.
Source: BusinessDay – Chuka Uroko