AFRICA
Several very large modern shopping malls have
been opened in North African countries in recent
years, such as the Mall of Arabia in Cairo (180 000
sqm GLA) and Morocco Mall in Casablanca (70 000
sqm GLA). In sub-Saharan Africa, the most well
developed and sophisticated retail market by far is
South Africa, with numerous large shopping centres
across the country.
In South Africa, the launch of popular international
brands is on the rise as more and more retail stores
satisfy the local consumers’ appetite for big labels.
Tony Galetti, joint-CEO and co-founder of Galetti
Knight Frank comments, “Recently the arrival of
top international brands such as Burger King, Top
Shop and Zara have caused a tremendous amount of
excitement in the local markets. Consumer demand
in South Africa exists in abundance, and it’s only a
matter of time till the lesser developed sub-Saharan
countries start demanding not only the same retail
experience as we have in South Africa with our varied
choice of world-class shopping centres, but also the
same products. South Africa is often used as a testing
ground for the international retailers. Once they
get established here, and get over the fear of doing
business in Africa, they will expand into sub-Saharan
Africa as a natural progression”.
Elsewhere, there are many countries where modern
shopping malls are a relatively new phenomenon:
The Palms in Lekki, Lagos, regarded as Nigeria’s
first modern shopping centre, was opened in 2006,
while Accra Mall, the first of its type in Ghana,
opened in 2008.
Nigeria and Ghana, along with other sub-Saharan
countries including Kenya, Angola and Zambia, have
all seen additional shopping centres either completed
or commenced in recent years, although their scale
is generally smaller than the mega-malls of South
Africa and Northern Africa. The construction of
further, and larger, shopping centres can be expected,
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Commercial Handbook 2013
as developers seek to meet the demand for high quality
retail space from increased numbers of international
retailers entering sub-Saharan markets and major South
African chains such as Shoprite and Pick’n Pay pursuing
expansion plans in the rest of Africa. Development
activity is, however, likely to be concentrated on the
biggest and wealthiest cities. In smaller African cities
and less well-off countries, small-scale local trading may
continue to be the dominant form of retail activity.
In fact, the coastal belt of South Africa typically sees
rural retail set-ups perform far better than ‘western
shopping centres’. While high-income groups rank
convenience as a top priority, the same does not apply
to lower-income groups. Many shoppers in rural areas
tend to stockpile and sell the goods on from small trading
set-ups of their own in the rural environment, so it is of
paramount importance that the offering be a hybrid
of supermarket and ‘cash and carry’ to encourage the
wholesale purchaser. Galetti says, ”The trick is to ensure
a clear understanding of this market’s specific needs and
consumer behaviour patterns.”
In the office sector, many key African cities have
severe shortages of high quality space built to the
specifications expected by international companies.
This scarcity of supply has been brought about by
a lack of infrastructure in many cities, which has
required the construction of completely self-sufficient
office blocks and office parks, with no reliance on
government for power, sewerage or any other services.
This has led to extremely high rents in some cities,
particularly where there is strong demand for office
space from international occupiers from the oil and
gas sector. Indeed, prime office rents in Luanda
and Lagos are amongst the highest in the world. In
Luanda, recent construction completions have eased
some of the pressure on the market and rents have
become more affordable over the last twelve months
but, even so, prime rents remain well above the levels
seen in leading global office markets such as London,
New York and Hong Kong.
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