Consumer boom lures mall developers
When Wal-Mart Stores bought control of major South African discount chain Massmart in 2011, American shopping mall developer Irwin Barkan had an epiphany.
When Wal-Mart Stores bought control of major South African discount chain Massmart in 2011, American shopping mall developer Irwin Barkan had an epiphany.
Barkan's US home market was "greying", while the youthful, underdeveloped African continent offered a sweet spot, with a rapidly expanding middle class and no competition from online retailers.
"When Wal-Mart announced it was buying 51 per cent of Massmart, I knew that if I was going to stay in business, Africa was where I had to go," he said.
He moved last year to Ghana, one of the continent's brightest economic hopes, and his company, BG International, has broken ground on what will be a 200,000 square foot enclosed mall in West Accra. Another mall planned for Ghana's second city of Kumasi is at a similar stage.
Barkan is not alone. Across Africa, commercial real estate developers are rushing to build malls for retailers.
But for developers, it is still a risky business. Investors estimate it costs between US$35 million and US$60 million to build a mall in Africa. Other obstacles include the difficulty of acquiring secure land titles and a lack of reliable data on consumption patterns.