Though the retail segment of the real estate market appears to be doing well with encouraging demand for basic consumer goods and entertainment amid economic downturn, a general view and analysis of the market shows it is still a struggle for the market as trading numbers remain low and space uptake slower.
A recent first quarter 2017 report on the retail market by MCO Real Estate shows that times are really hard for retail centres in prime locations, and worse for the newly delivered malls where achievable rents have fallen by up to 20 percent below asking rents.
Total gross leasable area for Lagos modern retail currently stands at about 118,000 square metres of space. Investors are constrained with increasing this space because of unavailability of the right land size at the right price.
“In the current challenging market, even Shoprite, the anchor tenant of choice with seven branches currently across Lagos has been forced to cut back on its growth ambitions. Development challenges of identifying large land sizes of about 50,000 square metres and above has led to an increase in the development of smaller malls on 15,000 square metres or less”, notes Munachi Okoye, CEO, MCO real Estate.
Scarcity and high cost of land in major cities are part of the reasons for the growth of retail market in what is now known as second tier cities of the country.
Resilient Africa is a South African firm that is in Nigeria with the intention to develop as many malls as they can within the shortest possible time, but has chosen to operate outside the due to land constraints.
Eddie McDonald, the company’s CEO, says “we are constrained by land availability in the big cities, especially in Lagos. Lagos can accommodate 20 malls but the problem is in finding the land. We cannot get the right land size at the right price to build the kind of mall we have in Owerri and even where you find one, the price will be too high”.
Land value in Lagos, according to him, is way too high to afford for retail development. “If we have to build in Lagos at that high cost of land, the rents will be too high and that will pose a big challenge to prospective tenants”, he says.
Okoye notes that the challenging market conditions mean that tenants are seeking rent reductions, fixed exchange rates, naira-based rents and shorter leases subject to negotiation.
“In addition, new malls face challenges of low trading numbers and slower uptake of space. Headline rents in prime locations stand at and $700 – $900 psqm, however in recent times, achievable rents have fallen by up to 20 per cent below asking rents. Total gross leasable area for Lagos modern retail currently stands at about 118,000 square metres of space”, he said.
Builders get more options as firm unveils new facility maintenance solution
More options are now open as Infusion Cleaning Services Limited, a leading facility maintenance company, says as part of strategies to deliver quality to its customers, it has introduced an Automated High-Rise Window cleaning and cradle services.
Dorcas Okobi, product and services manager of the company, said part of the objectives of the company was to provide excellent cleaning services to homes, business, facilities and construction sites.
Okobi disclosed that the company has introduced automated cleaning services which are the first of its kind in the Nigeria cleaning sector, adding, “with our newly acquired high rise cleaning machines, we offers perfect automated building cleaning solutions to building owners, building management companies, commercial companies as well as designers and architects”.
She observed that with these machines, traditional manual method would be a thing of the past as the infusion of high-rise cleaning machine gets the job done in less time with less resource.
According to her, “the infusion window cleaning system is a completely self-contained, self-climbing washing system for high-rise buildings that operate from existing roof rigs, davit arms, tracks or from the Sky Pro ‘4-Wheel’ steering rig, operated by wireless remote.
“The system uses ultra pure, de-ionized water to clean the entire building and leave windows spot-free, so no chemicals are required
“It eliminates the risk of fall from vertigo that manual cleaners are exposed to. It does not affect or disturb other activities as the cleaning is being done.
“These machines use distorts façade colour over time as customers are assured of high quality services, adding that the company offers one of the most competitive billings in the industry,” she said.
She further assured that Infusion Cleaning Services uses environmentally-friendly products. This is because they believe providing the best service requires using the best products and tools.
The company which was established in September 2014 is committed to providing the best residential and commercial cleaning services that could be found in Nigeria.