In an ever-shrinking retail world, Africa remains one of the last untapped markets. But that is set to change. In the past few years, Western companies have been making forays into South Africa – arguably the continent’s most developed country. Now they are now looking beyond South Africa’s borders (p44). And what could be more tempting than countries whose GDPs are pushing 20%?
Those who are first in will surely reap the rewards – eventually. Adventurous developers and retailers will have to be patient in the wait for a return on their investments. A great deal of Africa is still uncharted retail territory, not to mention the fact that many areas are politically unstable. But, as one commentator points out, Africa is going to boom, and when it does, Western companies will have missed out if they don’t get in there now.
Invest in the best
The credit crunch was always going to bite hard into the retail sector – after all, it was enjoying great success. And, when times are tight, consumers stick their hands in their pockets and keep them firmly there.
Investors are nervous as values on many retail properties have fallen by 12-20% (p38) since the summer. The mere mention of an industry giant such as British Land having to wipe £140m from the value of its flagship Meadowhall Centre is enough to make a grown agent wince.
But investors need to stay calm and stick with the market. Those with the courage to stay should, believe the optimists, see positive results by the end of the year. And optimism is what’s important for today’s retailers.
