Liberty Properties to expand into east and west Africa

Liberty Properties to expand into east and west Africa - Property Moneyweb

Follows the successful launch of a $200m mall in Lusaka.

The property arm of JSE-listed Liberty Holdings (JSE:LBH) says the entity is looking to east and west Africa as possible destinations for development. Liberty Properties successfully launched a mixed use development comprising a 30 000m² upmarket mall, a 10 000m² office park and budget hotel in the Zambian capital, Lusaka, earlier this week. The Levy shopping centre is named after former Zambian president Levy Mwanawasa.

Liberty Properties’ CEO Samuel Ogbu says the company hopes to launch a project in west Africa within the first half of 2012. Ogbu said after the Zambian launch: “We’re looking at west Africa , we’re looking at east Africa. We’re looking at doing another one of these projects in Zambia, possibly in the copper belt. It doesn’t’ make sense just to do one. Zambia has been identified as one of the growth areas and we are also under pressure from retailers to grow capacity for them.”

In west Africa Liberty currently has its sights set on Nigeria and Ghana, while Kenya and Tanzania are its main focus in east Africa. “We’re not at a stage yet to tell you that a site has been identified and we’re ready to go. We need to be very cautious of who our partners are because the one thing we are not willing to do is to compromise on delivery,” Ogbu said.

The CEO said that further developments in Africa will be based on the Levy model but will obviously be tweaked in line with the needs of the destination chosen. “We want to build capacity which is actually cheaper in the long run than to keep flooding the place with expats. You do need the expatriate expertise to start, and you do need to ensure the standards are complied with and at times it does take time to build capacity. South Africa does add value but for it to be sustainable, you need local partners to play an active part.”

Liberty’s first foray into Africa was indeed a learning curve for it and other stakeholders, and the approach was unique. The aim was to build a facility in line with the needs of the community together with the input of local businesses and local authorities. It wasn’t all plain sailing as Ogbu explains: “We were very hands on and was guided by the client (funder, Zambia’s National Pension Scheme Authority). We were dealing with a different set of rules. Local authorities are set up to protect their citizens. Wwe had to learn their rules and make sure we complied with them.”

The realities of Africa and its lack of infrastructure also impacted the Zambian project as the arrival of goods for some tenants were delayed for five weeks due to border problems. Shipments were stuck at the Zimbabwean border due to computer glitches. Trying to get the goods through via Botswana also experienced problems. Shrugging his shoulders, Ogbu says: “I’ve learnt a new phrase: just roll with it.”

Another encouraging element of the Levy project was the partnerships formed between South African professionals and their Zambian counterparts, which was a prerequisite of the funder. Ogbu explains: “It worked through the procurement process and was part of the tender process. We made it clear it was not a question of merely getting a local face to a South African provider. There had to be effective input from a local partner, which meant that local partner had to have the capacity to deliver. It made the process longer and it made it a bit frustrating at times, but in the long term it leads to a much better result. It leads to a true transfer of skills and building capacity in the local market which I think is essential for a sustainable offering and is the difference between the approach that makes you welcome and not an intruder.”

He says the journey for some of the South African contractors had not been easy: “The temptation is there for the skilled South African partner to say stand aside, let me do it. But we said no, no, no, you’ve got to take that person along with you.”

In instances where there were differences of opinion on building techniques, Ogbu said: “If it’s the way they build there, you have to persuade them why yours is better. Even in the design phase there was a problem when it became clear local capacity was inadequate. We said okay let the South Africans do it, but we had to find a way to skill them.”

The mall manager is Zambian with a technical back-up team of South Africans who are partnering with locals who will eventually take over the running of the facility.

On a lighter note, Ogbu says cultural differences also provided several challenges notably when stakeholders were invited to a “roof wetting”. “We had to explain what it was before they would come.”

Ogbu says what is clear is that Africa is hungry for an upmarket shopping experience.


Denny Crane

Denny Crane
It's not me ... yet. Denny Crane from the TV series Boston Legal. Click on picture if you're not sure who he is!