The phenomenal growth in the disposable income of Nigerians has in the last three years seen sales in the country’s retail market rise 50 percent from $106 billion in 2011 to $160 billion in 2014.
An independent feasibility study conducted on Abuja and Lagos by real estate investors shows that within the 9km trade area of income groups in Abuja, ranging from lowest to highest, 50 percent of the households were in the high income group category, with 78,000 of them earning income of over $150,000 per annum.
Retail market watchers estimate that sales would further rise to $198 billion by 2016.
In Lagos, within 8km radius of the Ikeja City Mall, there are roughly one million households spending about $1,500 per household per month across the various expenditure classes, giving about $18,000 per annum per household.
The rising disposable income of the population would continue to attract international companies and world-class retailers such as Carrefour and Pick n Pay, leading to the opening of more retail outlets.
BusinessDay Research and Intelligence Units (BRIU), in its report on the Nigerian Real Estate Market 2014, notes that in 2000 there were no malls in Nigeria, but the number has gone up to 30 in the last decade.
“Though not a big number, it still indicates rising demand for shopping outlets and spaces. However, it might be interesting to note that Lagos has only three ‘A’ Grade shopping malls for its population of over 18 million in comparison to Johannesburg, South Africa, with a population of 4 million, yet it has 72 malls,” BRIU says in the report.
Business Day had, in an earlier report, noted that this market was not growing as it ought to, explaining that the growth was held down by challenges in real estate space, the development of which was in turn hampered by issues in land acquisition and the right location.
“The complex land tenure system in Nigeria has been stifling the growth of the real estate industry. The Land Use Act calls for the governor’s consent for mortgages and land transfers which is expensive as well as tedious,” the report notes.