223 new malls expected in Africa by 2018 – Report

By 2018, 223 new shopping centres are expected to be opened in Africa, a report from Sagaci Research has revealed. Forty are billed for Egypt, 25 in Nigeria, 20 in Kenya, 15 in Ghana, 14 in Angola and 13 in Morocco, According to the group, a market intelligence firm dedicated to African markets, the total surface area by 2018 would reach 10 million metres square (m²).

The study said that the development was led by two types of players: International multi country operators such as South African McCormick Property Development and Atterbury Property Developments, and international developers/investors such as Actis/Laurus, RMB Westport, Majid Al Futtaim; and local players such as the Namibian Safcoll Holdings (Pty) Ltd and the Moroccan Compagnie Générale Immobilière.

Meanwhile, latest Shop Africa 2016 report has ranked Kenya’s capital, Nairobi, as the leading shopping mall developer in sub-Saharan Africa. According to a survey by real estate consultancy firm, Knight Frank, Nigeria was ranked three, while Angola was second, followed by Tanzania and Mozambique. While Nigeria currently has over 100,000 square meters (sqm) of leasable area in modern format shopping centers and will be adding another 180,000 square meters of retail space by 2016, Nairobi alone has a mall space of 391,000 square metres.

The study said: “Top five cities are Luanda in Angola, which is second, Lagos in Nigeria has the third largest mall pipeline, and then Dar es Salaam in Tanzania and finally Maputo in Mozambique completes the top five hotspots for mall space development in sub-Saharan Africa. The report said that these five cities were large, fast growing in economies, seen rapid expansion and being targeted by investors in Africa.

The Shop Africa 2016 report, which is the first review of the retail market in sub- Saharan Africa, revealed that Nairobi was the top city with the largest shopping centre development with approximately 470,000 square metres of shopping centre space in the pipeline.

With Kenya real estate sector booming, Managing Director of Financial Derivative Company, Mr, Bismarck Rewane, noted that there have been a lot of abandoned projects in Nigeria due to decline in government revenues. He added that contractor arrears of over N600 billion was a threat. Rewane pointed out that lower oil rents would limit government spending to priority sectors, adding that there would be more abandoned projects as revenues dry up.

According to analysts in the January edition of FDC report, lack of clarity in exchange rate policy and a continuous squeeze on household wallets might continue to have a negative impact on demand for property and development of new projects. He said that lower disposable income would affect demand for properties and that forex restriction would increase cost of imported building materials.

“Private investors have adopted wait and see position due to unclear policy direction,” he said. Besides, he said clamp down on corruption and money laundering means new money going into real estate would reduce. The nation’s real estate market was valued at N6.4 trillion ($41.2 billion) in 2015, according to a report by Agusto & Co.

Currently, Lagos and Abuja have about 10 commercial and office complexes, totaling over N100 billion, that are due for completion this year. Ongoing projects scheduled for delivery in 2016 are Madina Tower, The Wing Tower, Eden Heights, Alliance Place, Maryland Mall, Heritage Place in Lagos, Abuja World Trade Centre, Abeokuta Mall and Benin Mall.

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