HOW MUCH IS YOUR BUSINESS PAYING AS BASE RENT IN NIGERIA?

HOW MUCH IS YOUR BUSINESS PAYING AS BASE RENT IN NIGERIA?

The retail business expansion and rollout strategy are never complete without the understanding of the base rent, occupancy costs, advertising and traffic fees, retrofitting and operating expenses, etc.

Top in the mind of retailers – food, fast-moving consumer goods, health and pharmaceutical products – is how much a business can afford as rent (as a percentage of sales profit) in a particular location.

Calculating an all-inclusive cost — base rent and occupancy costs, operating expenses, advertising and traffic fees, retrofitting, etc. — as a percentage of sales profit requires a well thought-out and transparent benchmarks, supported by market realities. 

The current investment potential narratives within the warehouse/distribution and retail real estates call for caution and relying on actual and market data when budgeting, forecasting and securing spaces for retail business expansion and rollouts.

Positive growths in the warehouse/distribution and essential retail real estates, together with the exponential growth of e-commerce is causing a major take-up of short and long term retail space leasing in Nigeria.

The move by the retailers (especially those favoured by the pandemic-led changes) to localise supply chains to be closer to the customers, strengthening inventories and build up stock in order to quickly meet demand surges has significantly increase the need for retail space and occupancy costs within the industrial and retail real-estate markets in Nigeria. 

Locations within the cities suburbs and rural areas are attracting different base rents and varying incidentals. The details of the average base rents and incidentals (particularly for food, fast-moving consumer goods, health and pharmaceutical products) as tracked for the year 2020 and 2021 transactions across major cities in Nigeria are presented in the National Retail Base Rent series.

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