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What is your assessment of the growth of retail malls in the country?

First, there is a need to understand what is the proper definition of a mall. It is true many places claim to be providing malls but malls of international standard are usually in excess of 7,500 or 10,000 square metres gross lettable area and all malls of such standard do have a retail supermarket, which will take at least a 2,000 or 3,000 square metres space. But then you will have some taking less than 1,000 square metre built up areas referring to such developments as malls without even knowing who the anchor tenant is.

We have turned all shopping centres and plazas to malls. The growth of malls is still very low. I say that because if we take the measure from a Shoprite occupied mall and possibly, a Spa, which has two or three shops and Shoprite which has to date 13 operational with the 14th intended in Akure Mall, which we are involved with and which will open in October; if you add all those gross lettable areas, we are under half a million square metres of lettable floor areas in comparism to South Africa, which has over 20 million square metres of lettable shopping space.

So, we are far from achieving malls in that order.
Second, when we talk about malls and our malls have to rely 70 per cent on foreign retailers because ours are not empowered or not encouraged to develop, then to us as developers, we are at a big risk. It means that if a condition comes up and the international brands have to stop, then we have a problem. We have to start coming down to the level of small, upcoming local retailers who are also challenged economically.

You said Nigeria is still lagging behind in mall development but some business analysts are worried that these malls will stifle smaller businesses, especially those that are trade-oriented. Do you share this sentiment?

No, I don’t; it depends on what areas we are referring to and what sort of malls we are encouraging. For instance, as a company, we build affordable neighbourhood malls. We use the word affordable because to date, we remain the only developer that has a Shoprite as anchor tenant in a mall far cheaper than any other.

The rent we expect from the mall is quite affordable to encourage the local retailers; we are all challenged by the energy cost; so, the service charges are high. We design and build to a budget; so, we may not have the best gold-plated mall but it is functional and has been built and designed to what we believe the people can afford and not what is expected. Affordability and the ability to buy are two different things.

But, if we have neighbourhod malls in place, these malls will provide opportunities for all these small, corner street traders or retailers to get into and display their business. And of course, if the planning of towns and cities is right, there are places where the street retailers are still maintained all over the world.

There are quite a lot of things that could be done but what is important is for our government to support malls that will encourage and develop local retailers.

You mentioned that 70 per cent of retailers in Nigerian malls are foreigners, what is the implication of this to the economy?

With the exception of a few Nigerian retailers like Ruff n Tumble, HealthPlus, CasaBella, Diva Accessories and Da Viva and a few of them that are trying to grow but are finding it very tough, it is quite a harsh environment.

The local retailers may be reluctant to key into the development because the cheapest malls we have done are denominated in dollar but payable in naira. To date, we have the cheapest mall. The Cocoa Mall in Ibadan sold for $150 per square metre, which at the time was N24,000 using a yardstick of N160 to a dollar before the devaluation. Every other mall is in excess of this amount.

Now, the limit of the local retailers’ commitment is not limited to the rent; there is the service charge with energy taking up to 70 per cent and this works out to almost $120 per square metre per annum. By the time you add $150 to $120, which is the cheapest mall – averagely, malls go for about $500 per square metre – so $500 by $120, you are looking at $600. It means that if you take 100 square metre space, you are going to be paying about N10m per annum, which is not a very big space. So, you need to know that there will be patronage for whatever you are going to sell. This forces local retailers into mushroom space-taking in malls except those that believe they can but then a few find out that after a year or a few months, they cannot sustain rent and the service charge. We should have proper funding of malls, which is why we said that the government should see it as infrastructural development because it creates employment.

In a mall of 10,000GLA, Shoprite on its own plus its direct and indirect staffing, should have well over 400 jobs. So, a 10,000GLA gives employment to a minimum of 1,500 to 2000 people. It means that if we have 100 of such malls, 200,000 people, at least, will be employed. And 100 of such will be nothing for 10,000GLA which is like a small neighbourhood mall.

It also helps the Small and Medium Enterprises to develop themselves, their brands and have a place to display. So, the government needs to look into this area. This is why we ask, what is happening to the pension fund? Every developer all over the world uses pension funds. Now, it is in excess of N4.3tn and it is sitting in a cooler somewhere, where it is not being utilised; it is not helping employment or creating opportunities. When will this be made available to Nigerians to make the positive change that we are all craving for?

A lot of developers are focused on residential buildings due to the high deficit. What is your interest in retail mall development?

Housing provides shelter; mall development provides opportunities for employment. Now, when everybody is employed, people are able to live in decent housing estates and those housing estates are properly maintained and where mortgages are involved, there are no defaults because of unemployment. It’s been proved all over the world that once you live in a housing estate, whether given to you through government subsidy, if those within are not employed or have something to do, they turn such estates into slums.

You can imagine 50 or 60 per cent of the youths of such places or even those that are not youths but losing their jobs and having to live in such estates, it becomes derelict. Crime rate increases out of boredom.

When you look at the developed nations of the world such as the United States of America, what runs its GDP is retail. It runs the GDP of all the developed nations; it is the only way to keep above waters. It gives employment opportunities to many. It develops more brands, more innovations. And when you look at the tradition of the Africa, especially Nigeria, we have always been traders; we have night markets, day markets, weekly, monthly and bigger markets. Marketing, trading and being retailers have been part of our people. The only difference is that the developed nations may say ours is not structured but if we really go down into what they did in the past, it was structured in their own way. This is because they knew which days of the week to trade and what sections to display their wares.

Whatever structure we have, we should improve on that, infuse it with Information Technology and put it forward as an African solution. People have to eat. After the death of Kingsway Stores, the UTC and others, we lost over 20 years not improving structured retail business. But when Shoprite came about 10 years ago, it gave opportunities to those in the food and business sector. There were many people that loved to go into food processing but had nowhere to sell their products. Most felt frustrated and moved away. But when it came, it has helped those in packaging to improve. It has helped those in food processing too because the concept behind Shoprite is not to say no to your product if it is properly packaged. And if consumers buy it off on displaying it, then you are in business.

It’s been a big help and a showroom and something to develop the minds of the youth in seeing that they can be out of school and develop themselves as entrepreneurs and develop businesses that can do well. To miss out of retail will be a big minus to us. Everybody has tried to be in oil and gas but the future of that sector is no longer the same. But we have all seen that food will always be in demand. You need food, shelter, clothes and of course entertainment; these make the total package and this is why as a nation with over 160 million people, we need to be more involved in retail growth rather than paying lip service to it.

What is the impact of the naira fluctuation on property development?

It has had a lot of impact; we don’t even know what it is affecting right now. As a standard for malls internationally, it is denominated in dollars because international brands coming in do so on dollar rating. The CBN regulations and demands put restrictions on what foreign exchange should be, which at the end of the day, will have impact on the economy. But the immediate impact is that it will kill a lot of businesses, opportunities and, if care is not taken, it will increase unemployment.

PUNCH.

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According to the association, the rate of socio-economic advancement of the country has been held down as a result of the attitude displayed towards physical planning by policymakers.

The outgoing President of ATOPCON, Mr. Moses Ogunleye, who spoke on the sidelines of the association’s annual general meeting, noted that the country had failed to appreciate the symbiotic relationship existing between economic planning and physical planning.

He said, “It has been shown at the global level that countries, which hinged their development strategies on sound physical planning principles, tend to have faster economic growth than those that did not. Now is the time for governments in Nigeria to review their efforts and concerns for physical planning.

“For instance, if a state government has about 10 towns, it could say it wants to start with two in the first year. It is not about putting figures; it is first of all accepting the value of development plan and knowing what these development plans will cost and do what we call a rolling plan. When you do physical development plans, there are also micro development plans. For instance, in Lagos, if you do a broad plan for Ikeja, you can do a plan for the central business district but it is better to start with a district or town plan or a master plan.”

He added that any government that resolved to do a development plan and follow it would benefit immensely from it.

“Our cities have been growing without any guide and that is why Kaduna State Governor, Nasir El-Rufai, will go to Kaduna and demolish. If there is a place earmarked for schools, you don’t go there and build residences.

“When investors come in, we should be able to say, ‘this is the development plan’. If you plan to have an airport in a place, for instance, you just move in and start the project,” he said.

Ogunleye noted that the high incidence of crime, homelessness, chaotic traffic and abuse of natural resources such as surface water, wetland and forest in towns and cities had been traced to poor or weak planning.

He added, “There is a need for effective funding of physical planning matters by all tiers of government. Besides, physical planning should be strengthened at the local government level, with some functions devolved to the local government areas.

“As the nearest form of government to the grass roots or communities, the councils ought to be able to carry out so much in physical planning. The various aspects of the 1992 Urban and Regional Planning Law with regard to the functions of the LGA should be implemented by all concerned.”

He said local governments had a role to play at some level, but lamented that they were not doing anything.

“Some of them don’t know the responsibility that rests on them; so, we are challenging them to look at the various laws. Let every city manager be convinced that they need to do development plans. If there are no development plans, we have not started; when there is a plan, the government is taken more seriously,” he said.

The President, Nigerian Institute of Town Planners, Mr. Femi Olomola, said the institute planned to pass down the culture of planning to the coming generation.

According to him, professionals are doing everything possible to advance the practice of town planning as well as create awareness about its importance in national and economic development.

He said, “The mission statement of the present council of the NITP is that between us and the next generation, there is a contract. We owe it to the next generation to create an environment that will make the young ones believe that once they register and practise, they do not only have a good living but also access to fortunes.”

Olomola said that based on this, the council aimed to create about five million units of jobs in consulting in the next few years.

The President, Town Planners Registration Council, Prof. Layi Egunjobi, noted that there was a need for town planning professionals to adopt the three ‘Ls’ (learning, leadership and law-abiding).

Egunjobi said these qualities would help to advance the practice of physical planning in the country as well as improve the level of professionalism in the industry.

“Professionals should see themselves as leaders that require patience, integrity and peaceful co-existence; no one should feel they know it all. We should continue to adapt to development in the world at large and the profession in particular,” he said.

According to Ogunleye, the association has reached out to state governments and some government agencies at the federal level to expose them to the values of planning.

“People travel abroad and see the layout of their cities; we can convince government that instead of allocating billions of naira to projects, they should first accept that they need to do a plan. The cities are growing without plans,” he said.

PUNCH.

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Some of them, who spoke at the 2014 Annual Housing Summit of the Faculty of Housing, Nigerian Institution of Estate Surveyors and Valuers, said lack of political will to do the needful had hindered the growth of the housing sector over the years.

A former President of the institution, Mr. Bode Adediji, who was the keynote speaker at the summit, said the development of housing in the country was still at its infancy stage despite all the policies and programmesrolled out by the government from one regime to another.

“Since the implementation of most programmes and policies over the years has been characterised by lethargy, it is imperative for the government at the highest level to summon the political will required for the rigorous implementation of all the policies and programmes in the housing sector,” he said.

He added that it had become a matter of urgency for the various amendments proposed for the Land Use Act to be finalised and enacted.

Adediji said that not only had the contribution of the sector to the country’s Gross Domestic Product remained negligible at 3.1 per cent, but the projection of the sector had remained bleak.

Adediji, who spoke on the multiplier effect of housing on the economy and the general well-being of the public, said the major factors fingered for crisis included difficult access to land and finance, government bureaucracy and policy implementation challenges.

“The size of Nigeria’s mortgage market, for instance, is just N224bn, representing less than one per cent of the country’s GDP, while mortgage loan from the commercial banks is less than one per cent of the total lending portfolio,” he said.

Another former President of NIESV, Mr. Jonathan Idudu, said as part of policy implementation, which the sector lacked, money should be provided for housing from unclaimed dividends.

According to him, only an instituted vibrant mortgage system will get the country where it ought to be in the area of housing.

“Like the project it is financing, mortgage should be long-term and of a single digit,” he said.

The incumbent President of the institution, Mr. James Omeru, said there was no political will on the part of the government to provide housing for the teeming population.

He said, “We are no longer thinking that humans should have roofs over their heads. For instance, the estate surveyor who manages houses is not even in the scheme of things.

“We should be made to advise the government that if it needs to get the housing issue right; the right professionals must be appointed.”

Using Singapore as a case study, a facility management consultant and real estate practitioner, Mrs. Hikmot Koleoso, said the Singaporean government rightfully recognised a home as a tangible asset and a means of financial security and hedge against inflation.

“Therefore a political consensus was arrived at that housing was a basic human need that should not be subject to free market mechanisms and that the society should be responsible for its supply,” she said.

Koleoso added that there was the need for the government to understand that public housing could only be relevant if it was affordable.

She said, “Hence, in addition to huge financing through subsidies, government must be willing to adopt ingenious mechanisms that will make the schemes affordable to the populace, such as the Central Provident Fund financing that was practised in Singapore.

“Fortunately, similar national social security schemes already exist in Nigeria in the form of the pension fund contributions. The method of construction must be practical and speedy. Provisions must be put in place to make the tenures of the homeowners secured and terms of payment made flexible in order to accommodate downturn in economic conditions.”

The Chief Executive Officer, Nigerian Mortgage Refinance Company, Mr. Sonnie Ayere, said reforms of the residential housing market and the mortgage industry were crucial.

According to him, the housing market is still plagued with prolonged and costly registration process, high cost of locally produced building materials, protracted foreclosure process and high interest rates.

Ayere said unique Public-Private Partnership initiates such as the NMRC would help drive growth in the housing sector.

The Vice Chairman, Housing Faculty of NIESV, Mr. Biodun Odeleye, stated that professional bodies in the built environment should as a matter of obligation consider the establishment of model mortgage institutions that would be funded by their members.

He added that such bodies should also embark on direct construction of low-cost model houses, using locally sourced materials, with minimal imported building components.

“This may be a welcome development, a paradigm shift and a major drive towards supporting the federal and state governments’ efforts in this regards,” he said.

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At a special Ramadan Lecture held at the premises of the Epe Local Government Council, the Governor thanked the people for their support for the All Progressives Congress (APC) during the election period. He promised that the development of the Epe community would be utmost to him.

In his speech, he assured the residents that their gesture of support would not be ignored and that his administration would carry out infrastructural projects to improve their standard of living.

“I just want to say a big thank you to everyone here. I know that a lot of us contested, but the bottom line is that I belong to this community and whatever it is that we do, it is in the interest of this community. We are all going to stand together to make sure that the development of Epe is uppermost in our heart.”

Governor Ambode who hails from Epe, encouraged residents to join hands with his administration, urging Muslims to seize the period of Ramadan to pray for the success of his tenure.

“I am glad Epe is one. It pleases God that what we’ve missed in the city for almost forty years has come to us. It is now left for all of us to come together and join hands with this government.” He said during his speech.

He further stated: “There is nothing I can do for Epe people that can be enough, but I assure you that Epe would be a new city. All I need from you now is prayer because I am ready to pay my dues in Epe and I will try my best to ensure that Epe and indeed Lagos State witness all round development and transformation”.

Earlier, the guest lecturer, Dr. Nosirudeen Onibon, urged those who would form the cabinet of the Governor to imbibe the culture of moral competence in the discharge of their duties.

He stressed that successful governance was largely dependent on division of labour, imploring all hands to be on deck during the current administration.

Onibon expressed optimism that with Governor Ambode at the top of the state’s helm of affairs , Lagos would experience a great deal of development.

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The minister, who gave the assurance when investors in the project made an in-depth presentation to the FCT administration’s team at the Banquet Hall of the minister’s residence in Abuja, emphasised that the project is one of the milestone achievements of the transformation agenda of President Goodluck Jonathan in the FCT.

He said that the Federal Government under President Jonathan is determined to make Abuja a tourist destination of Africa and that is why the development of the 17 hectares of the prime land was on the front burner of the government, adding that Chicason Group will execute the multi-billion naira project in partnership with renowned international developer, Eagle Hills.

Mohammed revealed that the Abuja City Centre would be a mixed-use development that has the capacity to generate about 10,000 jobs with its multiplier effect on the economy of the entire country and that the FCT administration would enjoy 5 per cent equity shareholding in the Abuja City Centre Development Company Limited being a special purpose company incorporated to own and operate the centre; whilst the Abuja Investment Company Limited would hold such shares in trust for the administration.

“The land premium as well as the development control charges accruable to the FCT administration would be used as its equity contribution to the project. In addition, the investors would construct a National Mall at the cost of $40million at no cost to the FCT administration,” he emphasised.

Also speaking during the presentation, which was also witnessed by the FCT Permanent Secretary, Engr. John Chukwu and the FCDA Executive Secretary, Engr. Adamu Ismaila, the Executive Director-Africa, Eagle Hills, Abu Dhabi, Jaimal Shergill, disclosed that Abuja City Centre project comprises of four international hotels, residential houses, offices, shops as well as condominium which, would further stimulate economic activities not only in Abuja but in the entire West Africa sub region.

He assured that the ground breaking of the Centre would be undertaken before May 29, 2015, adding that the entire project would be executed in two phases.

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