Despite recession, rapid mall development expected in 2017

In spite of the recession that prevailed in 2016, mall development across the country continued to grow, and is set for further growth this year.

Part of the expected growth in the sector this year is the introduction of the first dedicated malls development real estate investment trust in Nigeria, Top Services Ltd Real Estate Investment Trust (TSL REIT) which will go public soon. The company which has been approved by the Nigerian Stock Exchange and Securities and Exchange Commission (SEC) is promoted by Top Services Ltd, led by Chief Tokunbo Omisore, a past president of the Africa Union of Architects.

Speaking on behalf of the TSL REIT team, Mr Winston Osuchukwu, said that in 2016, “mall development continued at a rapid pace with around five malls going into operation.” However, “currency issues, high power costs and falling real income were a challenge for the retailers and the mall operators.”

He noted that the new malls which came on stream last year were an indication that “the organised retail sector that malls serve is still in its infancy. So we can expect to see more malls to open in the foreseeable future.”

Mr Osuchukwu advised that for mall development to continue to thrive in the present economic circumstances, the funding model for mall development must evolve to match what obtains in developed countries.

According to him, “Long term financing must be made available to finance these long term assets at reasonable rates.

“The pipeline of developments for 2017 is already set and we will see even more facilities open over the year. However, we should see a change in design and approach to better match the facility to the economics of the host community.”