West Africa’s largest mall might be under pressure

West Hills Mall in Greater Accra, Ghana. Image Source: ARC Architects

Since it was completed in 2014, West Hills Mall has been the largest modern shopping centre in West Africa. At 27,700m², it trumps the 24,000m² Ado Bayero Mall in Kano, Nigeria (also completed in 2014) and is larger than the 25,000m² Jabi Lake Mall in Abuja, Nigeria, which opened in late 2015. Though the centre opened with a healthy mix of local and largely South African tenants, vacancy levels have risen sharply as the Foschini group, which brought up to 4 brands into the mall, and large sub anchor Edgars, are leaving.

West Africa’s largest mall might be under pressure - Brand Spur
West Hills Mall in Greater Accra, Ghana. Image Source: ARC Architects

The Foschini Group operates the American Swiss, Sportscene, Markham, Foschini and @Home shops at a block in the Eastern entrance of the mall, while Edgars, a subsidiary of Edcon Limited (who also own the Jet brand), operates a large block close to the centre of the mall.

West Africa’s largest mall might be under pressure - Brand Spur
Block of Foschini Group Stores outlined in red. Edgars stores during clear out sales in September 2019.

Speaking on the exit, West Hills Mall management released a statement in April saying: “The Foschini Group is reviewing its business strategy across Africa and has made a decision to pull out of Ghana and not just West Hills Mall… For West Hills Mall, this development, unfortunate as it may be, has offered an opportunity to introduce a new and exciting mix of local and international tenants to serve our customers. Management continues to review strategies on an ongoing basis to replace vacancies that emerge in the course of business, with brands which resonate with Ghanaians and meet demands of the local market.”

Their statement highlights a crucial point, the need to incorporate the right international but more importantly, indigenous/local tenants who can ensure some longevity. This is because indigenous retailers, who are not usually exposed to as much foreign exchange risk, typically understand local nuances and will almost always withstand market shocks better. Though progressing well, many indigenous West African retailers are still in the process of establishing themselves, and not all are entirely comfortable with the idea of occupying malls from a strategic or pricing standpoint. This has not been the case with retailers in Eastern Africa or the well known South Africa retailers. We need to pay more attention to this when retail investments are being executed in the region.

Approximately 5 years ago when the mall was set to launch, Johan Venter, Ghana retail manager for the group explained to The Africa Report: “We want to create a ‘Little Dubai’ in Ghana”. Speaking objectively, the corridor along Western Ghana on the N1, where West Hills Mall is located is currently seeing an exciting growth story, with many new developments and even more young professionals or growing families buying homes nearby. Large scale projects under construction in the region include the Eden Heights Multiplex, which should deliver over 1,250 apartments and the Fortune City Estate. Other fast-growing nearby neighbourhoods close by including McCarthy Hills, Dansoman and the small Bortianor beach town.

West Africa’s largest mall might be under pressure - Brand Spur
Eden Heights Multiplex. Image Source: Eden Heights

The shopping centre was meant to be the cherry on the top of this growth cake. The problem, however, is that the growing population or rising urbanisation narrative is not enough. For developments of this size, the demographics are not enough. While there are many other factors that are affecting retail performance including unstable currencies, weak purchasing power, unfriendly policies or even construction costs, the depth and availability of tenants in the market who can withstand the ramp-up period for this growth to play out are crucial, even more so in an out of town location like Weija.

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West Africa’s largest mall might be under pressure - Brand Spur
West Hills Mall in Greater Accra, Ghana. Image Source: ARC Architects

Even with the exit of Foschini and Edgars, the largest occupiers of space in the mall (anchors and sub anchors) are still foreign retailers. A few examples include Game, Shoprite, Silverbird, Jet, and the slightly smaller Mr. Price store. This presence of international retailers does not present a problem, but moving forward greater efforts need to be made in incorporating more local retailers.

To ensure the survival of retail centres within West Africa, the most notable directional shift so far has been the decision for most players to develop smaller centres and drill down on efficient engineering to ensure that construction costs and by implication rental costs can be reduced. These are among the points we noted in our 2017 Report – Boom and Bust: The Past and Future of Nigerian Retail. For the market to grow in the long run however, developers, investors, and franchisors need to come together to figure out how we can deepen the tenant pool.

Project Profile

  • Name: West Hills Mall;
  • Location: Weija Region, Accra – Ghana;
  • Developer/Investor: Delico, an investment company incorporated in Mauritius and controlled by Atterbury Africa and the Social Security National Insurance Trust of Ghana (SSNIT);
  • Architect: ARC Architects;
  • Main Contractor: WHBO;
  • Size: 27,700m²;
  • Completed: October 2014.

Culled from EstateIntel