select
|

Resilient Property eyes Nigeria

Fed up with extensive bureaucracy and red tape Resilient Property Income Fund plans to stop developing shopping centres in South Africa and move to in Nigeria.

Director Des de Beer explained the R11bn market cap company’s local operations are hampered by extensive bureaucracy and red tape, resulting in expensive delays.

Speaking during a tour of its malls in Mafikeng, North West and Kimberley and Kathu in the Northern Cape, De Beer stated: “The state of the local authorities and provincial government departments is of a big concern to us and is one of the reasons we’ve stated publicly that … our model of developing non-metropolitan area malls is drawing to an end.

“We’re building in Burgersfort and in Secunda in partnership with the Sasol pension fund. We’re building in Sterkspruit, but apart from that we are unlikely to build any new malls in South Africa.”
Pointing out an open field earmarked for expansion alongside the Mafikeng Mall in the North West province, De Beer explained that authorities there had lost Resilient’s documents 17 times without explanation how this happened. “They’re not accountable to anyone so they don’t really care”, he says.

De Beer adds regulations in the industry have “exploded” with local authorities and various government departments unable to manage them. “We’re experiencing extensive delays… which costs us money.”

Another drawback is that returns have declined with Nigeria promising better yields. “We’re expecting returns north of 10% in dollars, and they’re in hard currency. You won’t get the escalations you get here. Obviously gearing gives you a positive carry as well, so it enhances that return even further,” De Beer explains.

He adds: “We don’t particularly want to be in Nigeria, there are risks and it’s a tough environment, a new frontier and it’s not without its problems.

“In Nigeria there is a genuine desire to develop and uplift the country which government officials will facilitate in many instances. Obviously you get cases where they don’t. There have been instances in that trying to attract development they have donated land to developers. It is such a different mindset to what we have here where you have this wall of bureaucracy and inefficiency to deal with.”

Last month Resilient announced that it would be partnering with Shoprite and Standard Bank in Nigeria. “We’ve already identified sites and are going to do much smaller open centres with a simple design at around 15 000m². Being with Shoprite and Standard will help us understand the market better because they’ve been there for quite some time,” De Beer said.

Resilient expects to be on the ground with its first centre later this year. The focus will be on smaller malls due to a lack of retailers to fill larger spaces. Truworths, Woolworths and Mr Price only recently came on board with limited brands.

Lagos has a population of 17m out of a national estimate of 150m. Currently the city has two malls covering less than 50 000m². “In the South African context that’s not even one big mall. The potential is staggering,” De Beer says.

Returning to its existing malls, De Beer said they were trading well and extensions were being planned for ten of its developments over the next two years, including those in Witbank, Umtata, Mafikeng and Kathu.

(Moneyweb)



  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 25 Apr 2018
      Whether you are a seasoned seller or new to the game, putting your home on the market is an exciting moment. To ensure you get the best possible outcome these 8 value adding additions to your home is worth the effort.
    • 25 Apr 2018
      After four years of unprecedented growth fuelled by semigration, the Southern suburbs market faced a number of challenges in 2017, including dwindling affordability and a marked slowing in house price growth with many sellers forced to lower their prices in order to secure a sale.
    • 25 Apr 2018
      Mall of Africa, is celebrating its second year of sensational success. This splendid super-regional shopping centre first opened on 28 April 2016, and has grown in popularity, performance and profile since then.
    • 25 Apr 2018
      While the role of trustee in a sectional title scheme is a voluntary and unpaid position, it is one that comes with huge responsibility. Trustees have a fiduciary duty towards their scheme, says Chinelle Hewit, Operations Manager at sectional title finance company Propell.
    • 24 Apr 2018
      The thing about the property ladder is that at some point in our lives we all have reason to want to climb a rung or two higher. Sometimes, it’s because we’ve outgrown our previous dream home, or because we want to be in a better neighbourhood that’s closer to work or to schools. Sometimes it’s because our circumstances have changed, and we’re taking care of elderly parents or relatives. Sometimes, it’s just because we want a property that reflects the financial status our hard work has won.
    • 20 Apr 2018
      Whenever changes in the political ecosystem of a traditional property market create uncertainty, smart investors begin to look elsewhere for new opportunities. Property experts at IP Global have analysed the trends and crunched the numbers to find new markets to explore in Europe and the United States.
    • 20 Apr 2018
      Energy and water self-sufficiency are increasingly important factors in home buyers’ choice of property – especially in Cape Town where the extreme drought of the past few years has made municipal supply costly as well as uncertain.
    • 19 Apr 2018
      During the last decade, rampant development has progressively transformed Cape Town’s property landscape with densification being the order of the day, but there are still one or two hidden gems like Scarborough which have retained their original character, offering an inimitable lifestyle and an attractive investment opportunity.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK