South African supermarket retailer Shoprite Holdings has taken full ownership of three malls in Nigeria totalling 30,015m2 of lettable retail space. Delta Mall, Owerri Mall and Asaba Mall were jointly owned with Resilient Reit, a South African based mall owner and investment trust.
Some context. Shoprite Holdings entered Nigeria in 2005 and built a substantial network of supermarkets before exiting in 2021. Its stores were owned by Shoprite subsidiary Retail Holdings Nigeria, which was sold to Ketron Investment, itself a subsidiary of Nigerian shopping mall owner Persianas Investment. Persianas owns five malls in Nigeria under the “Palms” brand. Having acquired Shoprite’s store network, it continues to operate those supermarkets under the Shoprite brand.
Delta Mall, Owerri Mall and Asaba Mall were all completed in 2016. Delta Mall has a gross lettable area of 13,363m2. Owerri Mall has a gross lettable area of 8,686m2. has a gross lettable area of 8,002m2. The malls were owned by Resilient Africa (Resilient Reit) and Shoprite Holdings. Resilient Reit owned a 60.94% stake while Shoprite Holdings owned 39.04%. In 2021, In its financial statement for the period ending June 2021,
In its financial statement for the period ending June 2021, Resilient Reit announced it would be selling its stake to Shoprite Holdings. The sale did not go through and in the intervening period the value of the Naira has depreciated sharply. Shoprite had advanced a $45m loan to Resilient Reit on the sale of a portion of these assets back in 2021. The loan is apparently due in March 2024.
As a result, Shoprite has now acquired Resilient Reit’s 60.94% stake in the three Nigerian malls for R1 ($0.05). Shoprite supermarkets, now owned by Persianas in Nigeria, are the anchor tenants in all three malls. While the value of the Naira is so low, there is little value in Shoprite Holdings selling the three malls, which means that it has exited retail in Nigeria but remains as a landlord.
Trendtype has always questioned the structure of the Shoprite exit from Nigeria. That the sale took place is not in dispute. Shoprite supermarkets are off the balance sheet for Shoprite Holdings. But the fact that the brand remains in Nigeria suggests strongly to us that Shoprite has retained the option to buy back its supermarket network at some point in the future. We also note that in late February 2024, South African billionaire Christo Wiese, the former Shoprite chairman, told Bloomberg TV that Nigeria’s large and growing population is impossible for business to ignore and that “sooner or later the big players will enter again.”
