Page 30 - RLI April 2019

MARK FAITHFULL

FollowIng

the MoneY

MARK FAITHFULL CRUNCHES THE NUMBERS AS HE LOOKS AT
ANALYSIS AND EXPANSION THAT REFLECTS CHANGING MARKETS

MIPIM rePort: consolIdatIon MIPIM rePort: take a local vIew on aFrIca
aMong real estate brokers
nvestors and developers should evaluate the are also very important, as are retailers who appeal to
his has been significant over the past opportunities in African countries on an individual the mass market. If you have the right mix, the shopping
eight years according to the latest edition Ibasis, depending on location, asset class and the centre will perform strongly.”
Tof Real Capital Analytics’ (RCA) annual availability of dollar-denominated rather than local Looking at Nigeria, Bolaji Edu, CEO, Broll Property
ranking of global investment sales brokers. currency payment, delegates were advised during Services, added that despite claims of over-supply in
In 2011, the first year of publication, a session I sat in on, entitled Africa: Growth and the offices and retail sectors in the major cities, in fact
801 individual firms brokered at least one Investments at MIPIM in Cannes. well located assets in good locations are achieving high
commercial property valued at $10M or greater, Charles Hecker, Senior Partner, Control Risks, said occupation rates.
but last year that number fell to 662, according that comparing risks and returns in Africa with Europe “Investment success remains dependent on the
to Bob White, Founder and President of New or the US is “an exercise in futility” and proposed that fundamentals,” he said. “If Grade-A office buildings
York-based RCA. Significant M&A activity was instead investors should look at “which markets are are in the right place and with good amenities, such as
most acute between 2014 and 2016 but appears attractive and worth looking at and also what their parking, then they will be successful. Those that have
to have slowed, he added. However, focus has future prospects are.” been struggling or remain unoccupied tend to have
shifted from outright mergers to acquisition It was a view backed by Greg Pearson, Co-Founder, poor basics.”
of individuals or teams of brokers lured from Grit Real Estate Europe, who added that his company
competitors with lucrative incentive packages. had received some criticism for investing in a range of teMbIsa Mall, tembisa, south africa
“Global reach is increasingly important and asset classes and markets, rather than focusing on a developer: MccorMIck ProPertY
the relatively few firms that have it [at least specific region or property type.
10 per cent of activity in each of three global “We don’t feel that’s the right approach,” he said.
zones] collectively account for a 60 per cent “Instead we look at opportunities based on what is
market share, up from less than 50 per cent driving a country’s economy and also what will attract
five years ago,” said White. international occupiers, so that we are not exposed to
“The list of global firms is short: CBRE, JLL, the local currency.”
Cushman & Wakefield, Colliers International Samuel Kariuki, Managing Director of retail
and Knight Frank/Newmark Knight Frank,” development specialist Centrum Real Estate, said that
said White. “Publicly listed shares among the each African country has its own requirements and
major brokerage firms is now the norm. In that East Africa remained a strong market for shopping
fact, among the top 10 in 2018, all but one centres, so long as they have a good tenant mix and the
is listed, with billion-dollar-plus market caps.” right entertainment and food offer.
The percentage of deal volumes involving “Most malls are anchored by a supermarket, in
a broker has consistently increased over the particular South African group Shoprite,” he said. “But
years and reached 62.8 per cent in 2018. to make sure that people visit your mall, the sub-anchors

toPshoP and the cva showdown
ontroversial Arcadia boss Sir Philip Green is working on a restructuring of away success of many of the brands. The threat of a CVA was the shock headline
his retail fashion empire that includes flagships Topshop and Miss Selfridge. and if Arcadia was to do it, there would be an even bigger storm about the practice.
CIn what is an ongoing story, the billionaire’s company said in a statement The reports earlier that Arcadia was working on turnaround plans suggested
that it was suffering “an exceptionally challenging retail market” in the UK and that that formal talks with shop landlords were expected to begin in the next few weeks.
Arcadia was therefore “exploring options” to bolster the business. It emerged in January of this year that the business had hired advisers at Deloitte
Job cuts and store closures are likely, but they would not be “significant”, Arcadia to explore a restructuring, prompted by a decline in sales and profits.
insisted after reports surfaced that Sir Philip was considering a company voluntary
arrangement (CVA), an insolvency system that would enable him to seek rent cuts
and close unwanted stores.
Arcadia said that it was issuing its statement in response to media speculation,
but it made no mention about a CVA nor potential sales.
Instead, Arcadia said: “Within an exceptionally challenging retail market and given
the continued pressures that are specific to the UK high street we are exploring
several options to enable the business to operate in a more efficient manner. None
of the options being explored involve a significant number of redundancies or store
closures. The business continues to operate as usual including all payments being
made to suppliers as normal.”
News that one of the UK’s biggest fashion retail groups is struggling comes after a
string of high street names hit financial trouble still comes as a shock given the soar
50 RETAIL & LEISURE INTERNATIONAL NOVEMBER 2018