10 new Shoprite stores for Nigeria

Property group Resilient, one of SA’s largest owners of platteland malls, has entered into a joint venture with Whitey Basson’s Shoprite to build 10 shopping centres in Nigeria.

The deal, worth more than R1bn, also involves Standard Bank and Group Five.

Resilient MD Des de Beer, who has a formidable reputation for spotting growth opportunities, has been eyeing Nigeria for a while as the African country where he believes the group can best replicate its SA retail property model. De Beer says Nigeria’s population is a huge 155m but the country has only a handful of formal shopping centres.

He believes Nigeria offers better potential returns than SA, where opportunities for new retail developments have become few and far between. “The risk in SA is up but the returns are down. It’s time to explore fresh markets.”

Shoprite’s involvement as an equity partner will no doubt speed up Resilient’s entry into Nigeria.

De Beer says Shoprite has already spent a lot of time in Nigeria and has an impressive understanding of how that market operates.

“Being able to leverage off their existing skills base will significantly reduce our risk.”

Resilient and Shoprite’s venture will focus on centres 10000m²-15000m² in size. At least 10 suitable sites have already been identified in and around Lagos and Abuja. The centres, to be built over the next three years, will be anchored by Shoprite stores.

De Beer would like to list the shopping centre fund in Nigeria once it reaches the right critical mass, a similar approach to Resilient’s entry into Romania in 2007 through New Europe Property Investments (Nepi).

De Beer has been instrumental in growing the Resilient group’s assets under management from less than R500m in 2002 when the group made its JSE debut to more than R30bn today. Its interests include Resilient Property Income Fund, Capital Property Fund, Fortress Income Fund, Nepi and the management company of exchange-traded fund PropTrax.

Shoprite was the first SA food retailer to trade north of SA’s borders. Its African expansion started 17 years ago. Shoprite’s footprint has since grown to 123 stores in 15 countries. The group entered Nigeria in 2005 and now owns four stores there.