Liberty Properties learns lessons in Lusaka
Liberty Properties’ first foray into Africa, through its role as the development manager of the Levy shopping centre in Lusaka, Zambia, has many lessons for other South African property players looking to operate outside SA.
The firm has learnt the hard way that research on Africa is essential, and respecting foreign sensibilities — especially when bringing in professionals from SA — is also a must and makes business sense.
Being chosen as the development and project manager of the Levy shopping centre — a first for Liberty outside South African borders — came as a pleasant surprise but also one with many challenges, says Liberty Properties CEO Samuel Ogbu.
Speaking to SA Commercial Prop News on the opening day of the shopping centre last Thursday, Mr Ogbu says the opening came with mixed emotions, but “it was satisfying to hear the sound of footfall”. He says what is satisfying about the centre, which was constructed by SA’s Group Five, were the “high” standards used in construction.
“The Levy shopping centre could be anywhere in a developed metropolis in the world, with local relevance. The size, scale and quality of tenants also speak for themselves and is a unique mix for Zambia.”
Operating in African countries can test the will and temperament of the best and the brightest, especially in the real estate business, and Mr Ogbu can attest to that. Almost all construction materials came from SA, and Liberty had to contend with delays at the Zambian and Zimbabwean borders.
On the day of the opening, South African retailers Pick n Pay, Edgars, Exact, Truworths and Bata where still waiting for their products from SA. However, they had enough stock to open shop on the day of the launch after a three-week delay at the borders.
As if that was not enough, the official opening was called off the day before because Zambian President Michael Sata could not attend as he had other urgent matters to attend to. But that did not deter South African retailers from opening for business.
Mr Ogbu says the project provides a template for Liberty for similar developments in other African cities.
“While there were logistical problems, and construction material in Zambia is not of the quality we wanted, we could not throw our hands in the air in frustration. We worked with Zambians on the project because there had to be local input, but we have to recognise that they lacked the capacity to deliver.”
Mr Ogbu says it was a learning experience for Liberty as it had to take people along and transfer skills. “You have to adapt and persuade people on how you do things, and that helped.”
Liberty Properties was involved from the inception of the 30000m²² shopping centre, which includes an office and leisure offering. The leisure component includes the 104-room Southern Sun StayEasy hotel.
The cost of the entire mixeduse development was $200m, and was financed by Zambia’s National Pension Scheme Authority, which invests on behalf of public servants.
The centre has 72 stores, 97% of which are let, and has mostly South African retailers.
The Levy shopping centre may pull custom from Lusaka’s Manda Hill shopping centre and the planned Arcades Mall.
Stanlib’s head of property funds, Keillen Ndlovu, says there are a few South African property developers that are venturing into the rest of the continent and that there are many challenges.
“The challenge for most local companies has been: operating in an unfamiliar territory, uncertainty around land ownership, understanding the political environment, and finding local partners. There is limited information in terms of property market trends — rentals, vacancies, indices, etc. It’s unlike in SA, where there’s information provided by the Investment Property Databank and the South African Property Owners Association,” he says.