Investment Opportunities in Zambia: Focus on Mukuba Mall in Kitwe
Since the start of Grit in 2014, we have grown our portfolio from just two assets to 46, providing for an income-producing asset value of more than US $860 million (as at HY2020). With our investment portfolio secured by international blue-chip and multinational brands on long-term leases and a well-diversified property portfolio in selected African countries, we make use of the best investment opportunities in countries such as Zambia to the benefit of our stakeholders and investors.
Mukuba Mall in Kitwe
One of the superb investment opportunities in Zambia is Mukuba Mall with its modern design and spacious interior. The mall was developed in 2015 to cater to the shopping needs of Kitwe residents. Before the opening of the shopping centre, residents had to travel 60 km to Ndola or 378 km to Lusaka for their shopping needs. As such, the mall fills a gap in the market.
Mukuba Mall is a convenience shopping retail centre with backup power supply and potable water to minimise the effects of service interruptions on formal retail trading. Located in the second-largest city in Zambia, the mall caters to a large target audience. Kitwe is also known as one of the best-developed industrial and commercial areas in Zambia. Alongside Lusaka and Ndola, the area forms the hub of economic activity in the country and it also boasts several mines.
With anchor tenants including the likes of Pick n Pay, Shoprite, and Game, the retail centre houses some top multinational brands. The acquisition price for the property was US$ 31,5 million. It was valued at US$ 64 million in December 2019. The growth in value from 2015 to 2019 is indicative of why the mall lists among our prime investment opportunities in Zambia. With its location near the Democratic Republic of Congo (DRC), many regular visitors come from across the nearby DRC border.
The EPRA (European Public Real Estate Association) vacancy stands at 2,1% and the WALE GLA (weighted average lease expiry gross lettable area) is 0,5. The GLA is 28 236 m2, the EPRA-NIY (net initial yield) is 7,1%. The mall has 1102 barking bays. Considering these key performance measures, it becomes clear why Grit has increased its shareholding in the mall from 50% to 75% in 2019. With the Group’s increased shareholding, investors are expected to benefit from increase in net asset value (NAV) and contribution to earnings. . Convenience retail has proven itself as the most resilient to challenges in the retail sector. The mall dominates in the convenience retail category in Kitwe, making it a sound investment for the Group, its investors, and shareholders.
Why consider investment opportunities in Zambia
The country has a real GDP growth rate of 3,6% (2019), a population of 17,2 million, a GDP of US $68,9 billion, and a Moody’s credit rating of Caa2.
Investors in Grit benefit from our diversified portfolio of properties across multiple asset classes. With 92,8% of tenants being international, blue-chip counterparties, 94,1% of Grit’s income is in hard currency. Our goal is to be the real estate partner of choice to these multinationals and as such we prioritise long-term relationships with key tenants, to make the most of excellent growth and investment opportunities in Africa, including opportunities in stable countries such as Zambia.