Vernon Page, MD of ARM Hospitality and Retail Fund

Asset & Resource Management Company Limited (ARM) sees the hospitality and retail sectors in Nigeria as strong growth markets with attractive investment opportunities for investors with capital. In 2011, ARM launched a hospitality and retail fund, which the managing director, Vernon Page says is providing lucrative and diversified asset base for investors.  

What are the opportunities in Nigeria’s hospitality sector and particularly in the secondary cities?

The current demand in the hospitality sector exceeds the supply of hotel rooms of international standards. Consequently, business travellers in the secondary cities are seeking accommodation in unbranded hotels and guest houses, which are not always up to standard. However, as the economy is growing so is the demand for excellent hotels in the secondary cities where more business people are now visiting. The economy is forecast to grow at a rate of 6% over the coming years. The positive economic growth prospects and the expected expansion of the agriculture sector would make the outlook for the hospitality sector extremely good.

Do you see shrinking opportunities for investors in megacities such as Lagos?

With the explosion of urbanisation and the resulting increase in job opportunities and incomes, consumers will have disposable incomes to spend on basic and luxury goods and services. To capitalise on the business opportunities, companies will need to be well positioned in order to exploit the potential in the retail and hospitality sectors. Mega cities will definitely continue to provide more upscale hospitality and retail opportunities to their markets.

What opportunities are available to investors interested in ARM’s Hospitality and Retail Fund?

ARM has investments in Nigeria’s hospitality and retail sectors, which include the Four Points by Sheraton Lagos, and the Moorhouse Ikoyi. To exploit the demand for world-class hotel accommodation facilities and the fragmentation in the retail sector, a focused strategy would be needed and hence the launch of the ARM Hospitality and Retail Fund. Investors in the fund have access to a diversified asset base within our target sectors: high-end 4 and 5 star hotels, mid-tier 2 and 3 star hotels, high-end retail shopping malls, entertainment centres, and mid-tier shopping malls. We are looking to locate the facilities nationwide and in the rest of the West African region.

What is the outlook for Nigeria’s retail sector?

Nigeria is populous and the number of working adults is growing annually. The result is a vast and expanding middle class who have disposable incomes. These people are looking for foreign brands of merchandise, which are virtually non-existent in Nigeria. With few western-style retail malls in Nigeria and only a few under development, there exists a vast gap, which investors can take advantage of. These opportunities also exist in the secondary cities where urbanisation rates are rising.  The retail sector is forecast to grow in excess of 10% per annum for the near future.