Africa’s largest retailer Shoprite, disclosed on Tuesday, it would invest about 32 billion naira ($205 million) on real estate development in Nigeria, to provide infrastructure for its deepening expansion.
The influx of foreign direct investment in the country and the sheer strength of the number of its booming population has effected a slight climb in consumer spending which the South African supermarket chain is expanding aggressively to exploit.
BusinessDay reported a remark of Ron Klipin, a portfolio manager at SA Stockbrokers, on the development.
“I think we are going to see more and more of these property investments in the rest of Africa because many of these markets have great opportunities but little or no infrastructure,” he said.
Shoprite which currently has four malls in Nigeria said its expansion plan for June 2013 includes nine new malls in Nigeria and a vast 21 new malls in oil-rich Angola, according to Reuters.
In South Africa, Shoprite’s main market, rising unemployment and debt levels reduced consumer spending causing the retailer to record a below-forecast 20 percent profit rise to 607 cents in just ended fiscal year.
However, Shoprites’ outside South Africa business improved sales by 25.4 percent cushioning the chain stores’ group sales valued at 82.7 billion rand ($10 billion).
On Monday, the company’s shares rose 2.35 percent to 159.90 rand ($19) on the Johannesburg bourse.