Kaduna — The Managing Director of UACN Property Development Company Plc, Hakeem Ogunniran has said that uncertainties in the direction of the federal government’s policy has continued to create huge concern and constraints for those in the retail real estate sector as some of the large international retailers and local retailers operating in the Nigerian market have started to review their operations as well as retrenching workers and holding back on their commitments.
Speaking in an interview, he said the constraints are making some international retailers from the Middle East, Europe and America who are planning to invest in Nigeria to withdraw their plans; saying most of the newly planned shopping malls and centres by international and local investors are being suspended due to the waning interest of retailers and high financing costs of naira funding.
He stressed that the growth and development of the retail real estate sector is currently challenged, noting that the situation could crystallize significant levels of non-performing loans in the banking sector.
“We believe that there is an opportunity to salvage the sector through the federal government’s intervention in providing an enabling business environment for developers and secondary participants in the value chain to expand and implement backward integration strategies over defined timeliness as well as encouraging a lower interest regime to support the development of bankable projects in Nigeria by local and international investors,” he stated.
Ogunniran mentioned that between 2009 and 2015 in the light of the current macro-economic realities, the retail real estate sector gained significant interest from local and international investors, developers and retailers who sought to support the development of modern shopping malls and centres similar to those in Europe, America, South Africa and other developed nation.
The sector according to him has gained a high level of recognition so much that it attracted Foreign Direct Investments of $2bn-$3bn from a zero base, which were deployed towards the development of about 20 shopping malls and centres in over 10 cities, including: Lagos, Ibadan, Abuja, Port Harcourt, Kano, Warri, Ilorin and Enugu among others.