Why is Nigeria an attractive destination for foreign investors?
It is all about demographics!
We are a nation of 170 million people with a very high proportion of people between the ages of 15, 16 and 25, and that bulge of people is going to grow. Young people are generally very trendy and it is therefore a huge market that retailers should court as buyers when they are young and hopefully retain then as they grow older. The economy is growing exponentially and it will remain an enticing prospect for potential investors for years to come.
The past few years have seen the rise of modern shopping malls in Nigeria, especially in the country’s commercial hub, Lagos. Why is it so?
It is just a natural progression from what has always been a way of life for the average Nigerian. It’s a bit more formal now; more modern but with not much difference.
Nigerians travel a lot and buy a lot. There was an article in one of the British newspapers very recently that says that Nigerians are actually the biggest spenders on the high street in the United Kingdom. To me, it’s just a logical thing that Nigerians would end up having their own shopping malls.
The potential buying power of Nigeria is recognised by the outside world; there is a lot of wealth here and there is therefore a market here.
There have been huge barriers to trade in the past, however, since the lifting of some of the trade bans in 2011, trade in several items has been booming.
How do you secure the right tenant mix for a mall?
Basically, there is a science to achieving the correct tenant mix in shopping centres and one only needs to compare a shopping mall that has been let and leased by Broll, who understand the science of retail, with one that has been let and leased by another. Without the right tenant placement, tenant mix, the proper use of an anchor and what an anchor does to bring the right mix, a mall will eventually fail.
Some of the questions we consider are: how do people buy? What do people want? In what order do people buy? Who are the impulse buyers? Who are those who go straight to the destination? How do the children drive it? What is in the mind of people who are going shopping? You have to understand all of these and then you can decide to place the tenants where they would complement the other. This is why if you look at places, such as The Palms, Ikeja City Mall, the Grand Towers Abuja Mall, Polo Park, Kwara Mall or Ceddi Plaza, you see excellent service delivery in all areas.
How do you determine a suitable interior design for a particular mall?
As an architect, I advise on what will work, what will not, and what is generally easy to maintain. Shop owners do their own interior designs to suit their taste; however the common areas in the mall should not distract the buyer. Generally speaking, common areas whilst aesthetically pleasing , should be constructed with simple finishes for easy maintenance and to avoid distractions.
Is online shopping giving th emall owners a problem?
Online shopping can never take the place of shopping malls and when people say otherwise to me, I disagree. Many people want to sample products first-hand; a feature that is not available online. For example, women may want to find out if a dress suits them. In addition, you cannot tell the quality of the material used online. That said, whilst some may prefer to buy online, (as it can be a less stressful experience) there will always be a place for the high street store, and a place for the malls. In that regard therefore, the wise retailer will use the malls and online shopping side by side.
What are you doing differently from big departmental stores like Leventis and UTC that have existed before now?
This is the time for malls. The truth is that there are still many big departmental stores – maybe not in Nigeria, but certainly in other parts of the world like the United Kingdom, the US and the Middle East – and it is often these big departmental stores that are the anchor tenants in major shopping malls today.
How have you encouraged e-payment in malls?
In the first instance, for effective e-payment, one needs to have stable, uninterrupted electricity. In reality, many retailers and shoppers would prefer to shop with credit or debit cards. Shoppers with bank accounts can just go with just their cards and it is also safer as one is not carrying around loads of money. However, we have had instances where people have filled their trolleys in places like Shoprite and then the POS terminal is not working. They then go to the ATM machines in the mall to find long queues and sometimes this has led to them leaving their shopping. It’s all about ensuring we have the necessary infrastructure to support a cashless society.
Would you say you have put Nigeria retail market on the platform since the existence of these malls?
The truth is that before Broll came, there were no formal retail malls in the Nigerian market. What Broll has done is that it has brought with it processes and procedures from South Africa, and refined those processes and procedures to suit Nigeria. The fact that all my staff members, are indigenes of Nigeria means that Broll has an understanding of the way Nigerians think, and we factor that understanding into the system and the running of these malls. What we do now is give a peculiar offering to the Nigeria people. I can tell you that those who have gone away and want to do it on their own have often come back to Broll; this is because they know that we have good procedures. We operate a number of impressive world class malls like The Palms, Ikeja City Mall, Ceddi Plaza, Polo Park, Kwara Mall and Grand Towers Abuja Mall. We are also working with owners on, the upcoming Ado Bayero Mall in Kano, the Festival Mall in FESTAC, the Jabi Lake Mall in Abuja and the Delta Mall in Warri, (to name just a few). What people need to understand is that a company like Broll is very passionate about Nigeria. This is our country; if we don’t make it grow, nobody will come and make it grow for us. We have to look round and see what is going to add value to our own lives.
How do you intend to accommodate small retailers who are restricted by the rent in malls?
Unfortunately, to a large extent, this is the way the world is going. To some extent, smaller shops are going to have to look for strategies to cope somehow. Perhaps small retailers can look at their merchandise to see what they can do differently. Retailers will always have to keep moving with the time.
Where do you see the industry few years from now with more investors coming into the country?
It is difficult to determine because of some of the barriers I mentioned earlier, and this is where I raise a note of caution. It is not that there are no investors that would like to come in. It is not that there are no retailers that would like to do this. It is not that there are no people who want to be involved in this and to create wealth for this country, but the government needs to ensure that there is an enabling environment, beginning with the local government.
Looking at the potential for Nigeria in five years’ time, we could have reached the stars. I say this genuinely because when you talk to the ordinary man on the street, there is the willingness to do something. I deal with a lot of international people coming to do business. They go to other West African countries and whilst they accept that doing business there is a lot easier than in Nigeria, they claim that there is a vibrancy and energy about Nigeria that makes them all want to do business here. And then the infamous ‘Nigerian factor’ kicks in! We have to get rid of it. We cannot wait any longer. It is why we are in recession even though many do not accept that fact.
How would you rate these malls?
The best, A-Grade Malls are the ones that are let, leased and/or run by Broll and then there are the others.
Is there potential for more malls in Nigeria and the rest of the continent?
Yes and no. While Nigeria has the population to support more malls, there are many barriers and one of the biggest barriers is access to the right amount of land in the right location.
Other barriers include the costs involved with projects like this; often leading to rentals that many retailers cannot afford.
There is the desire though for malls like the ones we have currently. In 2006 when The Palms opened, there were trade bans in place. In 2011, when some of those trade bans were lifted, we now have international tenants, like Hugo Boss, Mango, Levis, Nike, Wranglers and many more.
How would you describe the demand from retailers to have a presence in one of your modern facilities?
The demand is high; we have people coming all the time.
What are the requirements these malls must meet?
The design of a mall is very important. The design should meet international building regulations’ standards. Ideally they should cater to all levels of ambulant and visual ability, and they must cater for children
In addition, a mall has to be easy and cheap to maintain, as the costs of maintaining the building will be for the tenants of the building. Often in Nigeria, we do not think of life-cycle costing and too often therefore, our buildings end up difficult and costly to maintain.
