In 2008 Ghana received its first A-grade shopping centre, the Accra Mall. A few years prior to that Nigeria opened its first modern mall, The Palms, on a 45,000m² plot of land in Lagos. They were the first of their kind in markets that would soon form part of the ‘Africa rising’ narrative, a term commonly used by the media between 2011 and 2014. And during that time, foreign retailers, brands and other consumer-facing companies rushed into key markets, eager to take advantage of Africa’s growing economies and emerging consumer story.

But today the ‘Africa rising’ narrative has lost some of its lustre – tainted by low oil and commodity prices which have slowed growth in many countries across the continent and placed pressure on consumers. Nigeria, which now has roughly a dozen shopping centres – has seen some retailers try and fail, such as South African clothing chain Woolworths.

“A lot of retailers have burnt their fingers over the last couple of years,” says Kevin Teeroovengadum, a real estate expert with over 18 years experience in African markets.

He noted that some of the newer shopping malls in Accra – opened in the last two to three years – are not performing as well as the city’s pioneer malls, and he thinks the market has become saturated.

Furthermore, while other less developed African countries, like Cameroon, might appear to hold similar opportunities to Ghana 10 years ago, Teeroovengadum doesn't believe the same approach should be taken.

“I believe there are opportunities in Cameroon, but it is about taking all the lessons learned in other markets and applying them.”

According to Teeroovengadum, one key lesson learned over the past decade is that developers should focus on building smaller convenience shopping centres (5,000-10,000m²), rather than mega malls. He added that there is demand for these smaller centres in almost every African country.

“Investors and developers have been taking stock of what has been happening over the last 10 years and whether it is replicable in other markets for the next 10 years ahead... There are opportunities in other markets but it’s not going to be about building big malls. I think you will see investors putting more money in smaller centres... more of a B-grade kind of mall rather than premium-grade malls.”

A similar approach was taken with Manda Hill in Lusaka, Zambia. Teeroovengadum explained it was first built as a smaller B-grade mall in the late 90s, and years later upgraded to the first-class regional mall it is today.

“So if that was the case of Manda Hill, which is a success, why wouldn’t we take this lesson and apply it elsewhere,” he continued.

“But I think [investors] are being more rational and pragmatic about the type of malls needed... Five years ago it was about building the biggest mall. Right now it is about what is going to function in those markets and we believe the smaller, convenience centres are the way to go.”

He added that smaller centres are also more aligned with the needs of retailers today – many of whom now have a better idea of the product mix that works in the market, as well as store sizes.

“So, for example, some of the retailers have had 1,000m² in malls and now they are saying there is no point having 1,000m² and they should rather have 500m² with less products.

“So I think over the next 18 to 24 months, there will be a reset within the industry, in terms of the way forward.”

Africa doesn't need another mega mall, says…