Nigeria remains very attractive market for retail property investors, with one of the private equity investors in Asaba, Delta State targeting to open for business in November.Despite the current recession that has reduced rents and increased vacancies in prime shopping malls.
The $45Million Asaba Mall, a joint venture between Resilient Africa, Baysol Development and Delta State Government, currently stands at about 85per cent completion and 50per cent occupancy. It is located at the corner of Okpanam-Illah Road near the government house.
Occupying a total land area of 47,067 square meters with 36 shops excluding Shoprite- the anchor shop covers about 3,000sqm, and 270 loading bays. Three pharmaceutical stores, some fashion stores, among others, have already signed in, while facilities are still available to potential tenants.
Speaking at the Asaba Mall Tenants Forum held recently at Lagos Oriental Hotel, Lekki, Chief Executive Officer of Resilience Africa, owner of the mall, Mr. Eddie MacDonald disclosed that the shops are leased out for two years at an average rent of N6 million per annum.
He said the fit-out deposit is equivalent to the first month’s basic rent paid before the beneficial occupation commences, adding that the deposit will be used to defray the levy charged for refuse /rubble removal, clearing and cleaning of the premises for non-compliance or damage caused by the tenant or his contractors during fit-out.
His words: “There are two ways a tenant can pay the security deposit (rent); in cash or by providing bank guarantee. If the tenant opts for the latter, then his/her banker would have to provide the landlord with an irrevocable Bank guarantee covering the three months of rent. Bank guarantee is acceptable for the security deposit only and not for the service charge deposit”.
According to him, the challenge in Nigeria is how to find land that could accommodate landed property in densely populated areas. “We are convinced that with the types of facilities we have on ground, these malls would be successful in the long run. We have invested in malls in South Africa with about 30,000 square metres span. In Nigeria we have been able to build small malls. The size of the mall was based on our market research with respect to the available tenants and the spending power of the people of the areas where the malls are located”, he said.
On the company’s plans to build more malls as well as enlist in the Nigerian Stock Exchange (NSE), he told The Guardian that contractors are currently on ground in Port-Harcourt to put in place about 30,000 square metres mall, while a Memorandum of Understanding (MoU) has been signed with a developer in Uyo, Akwa-Ibom State and plans are on for another mall in Benin, Edo State.
He added that the company wants to have sufficient malls in the market before enlisting in the Stock Exchange. “We are anticipating that once we achieved between six or eight Shopping Malls, then we will be in a position to go into the market, but at the moment, we don’t have sufficient critical malls to do that”, he stated.
In response to the slow retail market and challenges of competitors, he said the company was adopting the system used in South Africa by changing its model from yearly advance payments to quarterly advance payments.
MacDonald assured potential tenants of adequate security of lives and property, stating that the mall is well fenced with security cameras installed and police guards at both the entry and exit points.
He also affirmed that the company plans for a 24hours Helicopter surveillance of the mall. while issues relating to agitations from the local residence and stakeholders have been taken care of as the project has the support of the Delta State Government.
Also contributing, the Centre Manager of the mall, Mr. Aimhanesi Orbih assured prospective tenants of management’s readiness to deliver the mall by November. According to him, facilities include, food court, 1,250 KVA generator, gas tanks for food shops, standard water tank and treatment tank, air conditioning units; both central and non-central units.