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Grand Towers Abuja Mall opening indicative of economic progress in Nigeria

28 Jun 2012

Nigeria’s Abuja, one of the fastest growing cities in Africa, has seen the opening of a world class shopping mall, the first of its kind for the city.

On 21 June 2012 the 10 000m² Grand Towers Abuja Mall (GTAM), funded by the Novare Africa Property Fund 1, with 8 300m² of lettable space, opened its doors in the Dutse District of Abuja with 42 shops covering a retail mix of food, fashion, speciality, electronics, sports equipment, furniture, home improvement, entertainment and banks. The centre also has over 350 parking bays.

The mall officially was opened at a ribbon-cutting ceremony performed by South African High Commissioner to Nigeria, Kingsley Mamabolo.

Novare® Equity Partners, an African private equity manager based in South Africa, is the sub-adviser to the Novare Africa Fund 1, which was listed on the Stock Exchange of Mauritius in 2010 with a mandate to invest in commercial property development in Sub-Saharan Africa, excluding South Africa.

Cell 1 of the fund has a commitment of $81 million and Cell 2 was opened in May 2012 for fund raising. It has a number of developments at the acquisition phase and the construction of two more malls in Nigeria is on the track for this year.

GTAM is anchored by Shoprite, the South African retail giant and the biggest retailing group in Africa. Shoprite has been joined by a diverse range of Nigerian retailers as well as international brands Adidas and Kentucky Fried Chicken, South African restaurant chain Spur, banks, pharmacies and mobile phone companies such as MTN and Etisalat.

Work started on the mall in January 2011 and the project has been completed on budget, according to Deon Bruwer, Head of African Property for Novare Equity Partners.

Of those involved in the project, many of the skilled technical people were brought over from South Africa to supervise certain aspects, bringing the collective experience of over 300 shopping mall developments on the African continent to the project. They teamed up with Nigerian consulting companies though, partly because of their knowledge of local conditions and partly as a skills transfer exercise, added Bruwer.

Abuja, developed as the capital city of Nigeria in the 1980s to alleviate congestion in the commercial capital Lagos, and to symbolise geographical and political neutrality, is one of the fastest growing cities in Africa.

New urban areas are springing up on the edges of the city limits as the population increases and a growing business sector supports the large numbers of public servants residing in the city.

Stanley Duru, Chief Executive Officer of Grand Towers Realty Ltd, said it is estimated that in the past few years the city has swelled by at least half a million people. A major benefit for the mall development, he added, is that Abuja is inhabited mostly by middle and upper income earners.

The city has a relatively large and rapidly growing middle class of salaried government workers, diplomats and others with regular incomes that are, on average, higher than elsewhere. It is also the conference hub for Nigeria, with many international visitors in the city’s top hotels and venues,

Said Duru: “Shopping malls are not really a new phenomenon in Nigeria as we had malls in the seventies and eighties, but they all closed shop at some point. Nigerians have really taken to this way of shopping and we are seeing brands becoming more bullish about entering the market.”

Shoprite’s CEO, Whitey Basson has stated his positive stance on expansion into Nigeria numerous times. Shoprite has three stores in Lagos and one in Enugu in addition to the Abuja supermarket. Basson has noted that he aims to open over 600 stores in Nigeria, given the massive potential he sees in the market.

“We were extremely happy with the response to our opening last week in Grand Towers. It has been our best opening to date in Nigeria and the trend continued throughout the weekend. I am looking forward to the completion of the Mall as the people of Abuja are definitely looking for a place where they can do their shopping under one roof. It has also confirmed once again that Shoprite is the number one retailer in Nigeria with hundreds of people coming to the opening although the rest of the mall is not ready.

“We will continue to offer our everyday lower prices to consumers whilst maintaining the standard set for the opening of the store that is managed and staffed by Nigerians. We look forward to future developments in the city as we believe there are many more areas that can accommodate world class shopping malls like Grand Towers,” said Gerhard Fritz, Retail Director Africa at Shoprite.

Derrick Roper, the CEO of Novare Equity Partners, said of the Grand Towers Abuja Mall project: "We're proud to be associated with this development, which will make a big difference in the day-to-day lives of shoppers in Abuja.

"The Novare Africa Fund’s first phase of investments is in West Africa, leveraging off the African expansion strategies of key South African and international companies. The fund aims for US dollar returns of 25% a year and we look forward to The Grand Towers Abuja Mall contributing to the achievement of that objective."

Broll Nigeria, responsible for centre management and leasing, as well as Group 5 for project management, and DTV for construction, were also involved in the GTAM project.

“GTAM was opened for trading, albeit with only Shoprite ready to trade, on Thursday 21 June 2012 when an estimated 15 000 people visited the centre. It seems evident that GTAM will be a very popular shopping destination in Abuja,” Said Johan Venter, Executive Africa Operations, Broll Property Group.

Novare® Equity Partners has signed a Memorandum of Understanding on five other mall developments in Sub-Saharan Africa. Building on these should commence at the end of 2012.