Mid-sized shopping complexes and neighbourhood stores have been identified as key real estate investments that will drive growth in the organized retail sector in Nigeria.
This was disclosed by Ade Sun-Basorun, Chief Executive Officer Designate, FoodCo Nigeria Limited, during the just concluded 5th West Africa Property Investment Summit (WAPI Summit) in Lagos.
Sun-Basorun, the guest speaker at a panel session titled Success Story: Investment and Growth in Local/Regional Retail and Hard Discount Chains said: “Modern retail in Nigeria accounts for less than 10 per cent of the industry and continues to be significantly underdeveloped. This situation presents a unique opportunity for real estate developers and investors who can fill the gap by developing smaller neighbourhood malls or strip malls as they are called in the West.
“These developments, which could be as small as 3,000 sqm to 5,000sqm, can conveniently fit into specific neighbourhoods as opposed to the more popular large malls of about 20,000sqm or more that demand large scale constructions and, oftentimes, significantly disrupt the lives of neighbourhoods.”
Continuing, he noted that purpose-built mid-sized retail outlets sited in neighbourhood areas serve the needs of the local residents while simultaneously offering a similitude of the experience that large-scale mall customers crave. “They ease travel time and stress customers experience in commuting to large malls which are typically located in major city centres,” he submitted, noting that they are “easier to plan and develop given their smaller sizes.”
Calling on real estate developers and investors to harness the opportunities inherent in the Nigerian organized retail sector, Sun-Basorun stressed that the industry is at a period of accelerated growth that would have ripple effect on ancillary sectors including real estate.
“With an estimated consumer class of 52 million people, the future of organized and modern retail in Nigeria is bright and the only place it can go is up. The industry is at a defining moment where there would be accelerated rollout across the country. This bodes well for real estate developers as it will create significant opportunity for them to invest in commercial real estate,” he added.
FoodCo, listed by National Consumer Brands as a Top 10 supermarket brand, is a diversified consumer goods company with interests in retail, quick-service restaurants, manufacturing and entertainment, widely recognised as a key player in the Nigerian retail space and currently operates the largest supermarket chain brand in South-West Nigeria.