Economy
Recession: Mall Developers, Tenants Consider Rent Renegotiation
By Maureen Ihua-Maduenyi
With the current economic crisis creating challenges for all sectors of the economy, the country’s rapidly growing retail sector is struggling.
Apart from a few malls, most retail facilities in the country were funded by private equity firms that got their funding mainly from foreign sources; and by virtue of this, they are currently facing a lot of challenges as many of their tenants who sell mostly foreign products, are finding it difficult to stock up or fit out in new malls due to forex scarcity.
Findings by our correspondent indicate that many tenants are no longer paying rents in some of the big and expensive malls, because the rents are high due to the naira to dollar exchange rate, and most of the retailers don’t have enough liquidity to stock up due to the forex restrictions, high costs and problems associated with importation.
According to a source, who did not want to be quoted, some tenants owe as much as 15 months’ rent and developers cannot ask them to vacate the malls as empty shops in a mall is an indication of a failed project.
Our correspondent gathered that the landlords were becoming more creative to keep their tenants in business and the malls functioning.
It was gathered that one of such creative ways was to ask tenants who owed rents to pay the service charges.
“If the rent is paid and the service charge is not paid, it becomes the landlord’s headache to settle the service charge. So, he will rather the tenants pay their service charges to keep the malls running,” a source told our correspondent.
An estate surveyor and valuer, Mr Rogba Orimolade, said majority of the functioning retail facilities were struggling to survive.
“A lot of these retailers are those who rely on not just forex, but goods that they bring in from overseas, and they are struggling. The market itself is in recession, so a lot of the malls are caught in the middle. Some of the tenants are leaving; some are trying to adjust and see what kind of local products they can stock,” he said.
According to Mr Orimolade, investors are also trying to make tough decisions such as pegging rents in such a way that tenants will not be discouraged, with some landlords already giving discounts, while some are reducing their rates against the Central Bank of Nigeria’s naira to dollar rate.
He explained, “There are so many ways that a lot of promoters of these malls are becoming creative with the way they ask tenants to pay their rents and it is only realistic they do that. From the way things are going, most of the malls that are going to be coming into the market now will source their funding locally and ensure that the rate they are charging is strictly in naira.
“Foreign investors also have to adapt, that is the reality. Sourcing for offshore funds is no longer realistic.”
He said that apart from facilities such as the Ikeja Mall and The Palms, both in Lagos, that were doing well in spite of the economic realities, because of their locations where retailers were eager to get shops, many others were groaning as a result of the economic crisis.
Mr Orimolade said, “Apart from some whose promoters who were able to read the market on time and focus more on Nigerian companies to take up spaces, many malls in Lagos and other parts of the country, especially those built with offshore funds, are struggling and have 30 to 40 per cent of their shops vacant.
“Their projections were that a lot of those foreign companies would take up space but those companies backed out, some even relocated from Nigeria.”
Rents in malls across the country go for as high as between $100 and $120 per square metre monthly; and are mostly paid quarterly, with many of the retailers taking spaces from 60 square metres upwards.
The Consultant, Retail Leasing, Broll Nigeria, Mrs Lola Toye, said business had slowed down in the retail market because of the economy and the cost of products.
She, however, said that even before the recession, some retailers had been struggling due to the kind of products they were selling.
Mrs Toye said, “Malls are not really empty, they may not be full either, but tenants not keeping up happened even when the economy was booming. There is low spending power, so people are cautious of what they spend money on. They now focus on essential things rather than non-essentials.
“Those of us that are letting offices are also experiencing this. There is an impact, but developers are still building despite this. Things are not shutting down, people believe that the economy will turn around shortly and when it does, they will be ready to take in new tenants.
“Landlords are making concessions; those who borrowed in dollars and need to pay back their loans need to do that in dollars. Landlords need to recoup their investments, while tenants also need to make money. So, both tenants and landlords are getting more creative.”
According to Mrs Toye, there is still a huge demand for shops but it is taking longer to fill the malls than it was in the past and landlords are looking at charging rents annually instead of quarterly.
“With this, they don’t have to worry about any kind of fluctuation in the currency; within 12 months, things can turn around. Some malls that are not based on dollar investment can charge in naira. We are looking at what suits the tenant and what suits the landlord. We are optimistic and very cautious too,” she added.
Malls developer and the Chief Executive Officer of Top Services Limited, Mr Tokunbo Omisore, said concession had always been considered between landlords and tenants.
“I cannot, for instance, charge rent at the rate of the parallel market and it has been on for a long time,” he said.
The Founding Partner, Bode Adediji Partnership, an estate surveying and valuation firm, Mr Bode Adediji, said the biggest problem in the retail sector remained the payment of rents in dollars.
He added, “Charging tenants on dollar basis is okay in the interim, but it is not sustainable; there will always be an impact of the rent on the income to be generated by tenants. All over the world, rental charges are based on an understanding between landlords and tenants; but in Nigeria, it is totally absent. Landlords think they matter more, the mind-set is either you can afford it or not.
“The business model for a shopping complex should never be based on the short or medium-term; it should be on a long-term basis always.”
According to Mr Adediji, the way out of the current problem is for rental and lease agreements between shopping mall tenants and landlords to be based on realistic and sustainable parameters.
By Adedapo Adesanya
The National Pension Commission (PenCom) has defended its decision to allow Pension Fund Administrators (PFAs) to invest in the parent companies of their custodians, insisting that adequate safeguards are in place to protect contributors’ funds.
The director-general of the pension regulator, Ms Omolola Oloworaran, speaking on Tuesday during the Meet the Press Briefing at the Presidential Villa, Abuja, said the commission’s decision to relax the investment restriction followed a comprehensive risk assessment that found minimal conflict of interest.
She explained that under PenCom’s investment regulations, PFAs are only permitted to invest pension assets in carefully selected instruments that meet stringent criteria, including profitability, strong credit ratings and proven track records.
According to her, the commission regularly reviews its investment regulations, conducts routine examinations and spot checks on PFAs to ensure strict compliance with established risk management guidelines.
“PFAs cannot just go into the stock market and buy any kind of stock. There are strict guidelines. Companies must demonstrate profitability, have a proven track record and satisfy other criteria before pension funds can invest,” she said.
Ms Oloworaran noted that each PFA also operates under the oversight of a board, an investment committee and a risk management committee, providing additional layers of governance to safeguard contributors’ funds.
She said PenCom recently issued a circular allowing PFAs to invest in the parent companies of their custodians after determining that the potential conflict of interest was negligible.
The PenCom boss explained that the parent companies involved are largely Tier-1 banks, including First Bank, United Bank for Africa (UBA) and Zenith Bank, which she described as A-rated institutions with strong financial foundations.
She said the policy was intended to widen investment opportunities for pension funds without compromising safety.
Using Stanbic IBTC as an example, Ms Oloworaran explained that if its custodian is Zenith Bank, the previous restriction prevented the pension administrator from investing in Zenith Bank shares despite the bank’s strong performance.
“We reviewed the risks and any potential conflict of interest and found the risks to be very low. That is why we opened that investment window,” she said.
By Aduragbemi Omiyale
Analysts at Meristem Research have predicted that the inflation rate for June 2026 in Nigeria should marginally rise to 15.95 per cent on a year-on-year basis from the 15.93 per cent reported in May 2026.
The National Bureau of Statistics (NBS) is expected to release inflation numbers for last month later today, Wednesday, July 15, 2026.
In its report sighted by Business Post, Meristem Research said it expects inflationary pressures to re-emerge across key economies in the near term, as the re-escalation of the US-Iran conflict has reignited upward pressure on global oil prices.
It disclosed that this marks a sharp reversal from most of June, when the ceasefire between the two countries helped drive oil prices lower, raising expectations of some relief on the inflation front.
With conflicts now flaring up again, oil prices are likely to increase again, and the anticipated easing in energy-driven inflation may not materialise as broadly as earlier envisaged.
“Nonetheless, some relief is likely from the food segment, where robust supply conditions across major producing regions and softening demand should continue to ease food price pressures,” it stated.
The team also explained that it projected a 15.95 per cent inflation rate because of the lingering effects of persistent food price pressures.
“However, we expect core inflation to moderate as the sharp reversal in energy prices begins to filter through to transportation, distribution, and other energy-related costs, easing underlying price pressures.
“On a month-on-month basis, the combined effect of lower petrol prices, a relatively stable Naira, and the gradual pass-through of reduced energy costs across the supply chain should exert further downward pressure on inflation.
“Based on our assessment, food inflation is expected to remain the key swing factor, as seasonal pre-harvest supply constraints are likely to offset some of the gains from lower logistics costs,” it said.
By Adedapo Adesanya
The duo of Central Securities Clearing System (CSCS) Plc and Afriland Properties Plc weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.61 per cent on Tuesday, July 14.
CSCS Plc saw its stock value drop N9.08 to close at N82.40 per share compared with the preceding session’s N91.48 per share, and Afriland Properties Plc slid by 17 Kobo to sell at N15.00 per unit versus N15.70 per unit.
The losses recorded by the two securities pulled back the market capitalisation by N41.64 billion to N2.546 trillion from N2.587 trillion, and cracked the NASD Security Index (NSI) by 69.36 points to 4,242.31 points from 4,311.67 points.
It was observed that the exchange witnessed two price advancers during the session, led by FrieslandCampina Wamco Nigeria Plc, which gained N1.37 to end at N151.37 per share compared with the previous day’s N150.00 per share, and Food Concepts Plc chalked up 5 Kobo to settle at N2.50 per unit versus N2.45 per unit.
The volume of securities traded by market participants surged by 50.7 per cent to 13.7 million units from the previous 9.1 million units, while the value of securities went down by 79.7 per cent to N65.2 million from N320.4 million, and the number of deals crashed by 3.6 per cent to 27 deals from the previous session’s 28 deals.
At the close of transactions, Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with the sale of 3.4 billion units for N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc, which exchanged 2.3 billion units valued at N6.5 billion, and CSCS Plc with 73.9 million units transacted for N5.2 billion.
GNI Plc also closed the trading day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
