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A recent report by commercial property services company, Broll Property Services Limited, on Nigeria’s retail market viewpoint in the first quarter of this year, found that it was becoming increasingly difficult for retail industry stakeholders such as developers, retailers and manufacturers to run their operations in the country due to economic instability.

The report also found that developers were the worst hit as many retailers were finding it difficult to take up space in malls.

The report stated, “Developers may have to push out dates, opt for phase developments, or reduce the size of the development all together to limit risks. This will create a considerable slowdown in the growth of the formal retail market across Nigeria, especially outside the prime locations in core cities of Lagos, Port Harcourt and Abuja.

“Developers such as Resilient Africa, who are still moving forward with development plans, are limiting their exposure to the market by reducing the size of their retail projects. Two of their planned projects in Owerri, which opened in February 2016, and Asaba were reduced from 13,000m² to 9,000m².”

Developers are, however, not the only ones affected as many retailers have also started cutting down on space and staff strength or closing shops altogether.

An estate surveyor and Principal Partner, RogbaOrimolade and Co., Mr. RogbaOrimolade, told our correspondent that the instability of the naira exchange rate was affecting not just retailers and developers, but also the financiers and real estate agents, who were fully into the letting of the retail stores.

He noted that there were certain categories of retail outlets, which take up spaces in the malls, and a lot of them deal so much o imported products.

Orimolade added that retailers such as Pep Store, Mr. Price and even Shoprite, to an extent, were all affected and this had in turn affected upcoming malls and the development pipeline.

“If majority of these retailers are the key anchors, obviously the developers can’t do much without them being able to still take up spaces. Most of their materials are imported and they rely heavily on foreign exchange. Of course, a lot of them are suspending taking up spaces; some still take and are still in the game, but their operations are slowed down,” he said.

According to reports, Truworths, a South African fashion retailer, like its counterpart, Woolworths Holdings Limited, which left Nigeria in 2013, had early in the year closed its two remaining stores in Enugu and Delta due to capital controls.

The clothing company reportedly struggled to get stock into and cash out of the country for some time before deciding to call it quits.

While Woolworths attributed its exit to tough market with high rental expenses, Truworths said it could no longer cope with difficult regulations.

The Chief Executive Officer, Truworths, Michael Mark, was quoted as saying that the regulations were making it extraordinarily difficult to get stock into the stores or get money out.

“So, there was no point any longer. Obviously, everyone gets excited about Nigeria because of its size, but I think they’ve taken an incredible strain with internal problems in the country politically; and then, there are the issues with their oil,” Mark was quoted as saying.

The report, however, stated that some retailers, such as Shoprite Africa, increased their sales by 19.7 per cent by exploring local distribution and sourcing options to significantly reduce the import bills.

Malls developer and Chief Executive Officer, Top Services Limited, Mr. Tokunbo Omisore, said the real and retail sectors had been made unattractive.

He noted that prior to the fiscal policies, retail malls’ development operated a dollar denominated rental, though payable on due dates in naira.

This, he said, helped international retailers and investors to operate locally and remain listed abroad, but that the policies came in unexpectedly and shut down this growth thereby, causing a withdrawal of those presently operating and restrictions to newer ones.

Omisore added, “Investors have been denied affordable funds to provide the infrastructural platform for the retail industry to grow. As l have said repeatedly in the past, the real sector must be provided long term funding at a single digit to meet rental demands and provide opportunities that are sustainable.

“Our recent mall development opened in the fourth quarter of 2015 and lost 40 per cent of her prospective anchor tenants, undermining the local bank loan in place. The situation has become one that the local banks do not dialogue with the CBN but simply accept instructions at the detriment of increasing non-performing loans and discouraging entrepreneurs.”

PUNCH.

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The bank, in a statement on Tuesday, said the partnership would enable middle-class Nigerians and interested individuals to own houses in housing estates located in Abuja, Ibadan and Lagos.

According to the bank, about 500 housing units are expected to be delivered before the end of the second quarter of this year, adding that mortgage facilities will be available for individuals that are unable to make cash purchase.

The statement read, “With this move, our bank, which is noted for its huge investment in real estate developments in Ofada, Ogun State; Karu Area Council, Abuja; Lekki, Lagos State; and a host of other places in Nigeria, will increase the number of beneficiaries of its facilities.”

The Head, Business Development, RSL, Mr. Yemi Popoola, stated that the bank had invested over N3bn in real estate, and had created mortgage in excess of N5bn over the past 36 months.

This, according to him, has helped in reducing the housing deficit in Nigeria.

He added, “The housing estates will be tastefully furnished in prime locations within Abuja and Lagos. A typical unit will go for between N9m and N20m, and it includes a large living room attached with toilet, fully-fitted kitchen and other rooms, which are en-suite with shower.”

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