Despite Mozambique’s economic challenges, the Pemba Retail Centre is finally opening its doors to the public this week, marking a new way of shopping for the people of Pemba, Mozambique. Atterbury’s Gerhard van der Westhuizen shares some background intel.

When is the official opening?
In line with the Atterbury tradition, it happens on the last Thursday of the month: 29 June.

When work started on the development there were no formal retail options to speak of in Pemba, bar tiny supermarkets, with most buying and selling happening by the side of the road or at informal markets. How has Pemba Retail Centre been received in this landscape?
The local and broader community is extremely excited about the opening of this centre. Not only will the they be able to do all their grocery shopping at one location, they will also have the advantage of buying goods at more reasonable prices. The centre will benefit all income groups.

What has been the main challenges in completing a retail development in such a rather underserviced area?
The letting of the premises presented the main challenge in Pemba, because it takes a lot of effort to get the local tenants to commit. This is due to two reasons: firstly the economic crisis in Mozambique which goes hand in hand with the depreciation of its currency against the US dollar. We finance and develop the shopping centre in USD, which means that tenants pay rentals in dollars too. The metical has halved in value against the dollar since 2014 (30 mets to the dollar then to 60 mets to the dollar now). Tenants do business in metical, so they have to double their turnover to afford the same rentals as three years ago… The second reason is that we face an historic bias – tenants are reluctant to commit to any leases upfront due to the historic nondelivery by developers in the country. They want to see the completed shopping centre before they commit.

What will the occupancy rate be when the official opening takes place?
On opening day, Thursday 29 June, three tenants will be open for business: Shoprite, OK Furniture and Pep. These stores account for about 60 percent of the total space available in the centre. As mentioned earlier, now that the centre is finished and has become a tangible reality, we’re seeing interest from prospective tenants. We believe we will be fully let by December this year.

So aside from the confirmed tenants, what is the capacity? How many stores are there?
We have 20 stores in total and are currently in advanced negotiations with 10 exciting tenants.

What is being planned for the official opening? Has there been much anticipation from the local community?
Everything is steaming ahead for the opening on Thursday. The President of Mozambique will formally inaugurate the centre on Wednesday 28 June, and then it will be open to the public on the following day.

And going forward? What is Atterbury’s future involvement with Pemba Retail Centre, and is there a time frame for the planned office development?
Atterbury Asset Management (SA) is responsible for the wellbeing of the centre from the opening date; and is building a relationship with Ilulu, a local property management and financial services company who will be managing our portfolion in Mozambique, including Pemba Retail Centre. In terms of the office development, we trust that this will happen in the near future.