Plazas booming property investment in Kano

The ancient city of Kano in Kano State is witnessing rapid development in the property market, especially in plazas that are being built almost everywhere.

There is hardly any street in the metropolis that has not had a mall built on it in the last couple of years. Even the Government Reserved Areas (GRAs), which are statutorily residential, now have plazas; a development which has left many residents worried that it is turning almost every part of the town into market.

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Notable Kano streets that have witnessed this surge in the construction of plazas include Zoo Road, Zaria Road,  BUK Road, Katsina Road, Airport Road, Hadejia Road, and Hotoro area on Maiduguri Road.

The situation is no doubt a sign of a booming property market, but the cost of renting shops or office spaces in the malls has become a challenge to many Small and Medium Enterprises (SMEs); with some going out of business because of their inability to afford the high rent charges in the flashy buildings.

Many SMEs have reportedly closed business or relocated to suburban areas where rent is relatively affordable. On the other hand, the plazas have brought in many businesses and provided employment opportunities to many youths, as well as created small business clusters in and around them.

But with the high cost of renting shops in these new plazas, Daily Trust gathered that majority have remained empty.

Jibrin Abdullahi, an estate agent in Jaba, one of the developing and expensive areas of Kano, said government officials, wealthy individuals and companies had since realised how lucrative the business was, hence the huge investments in “that aspect of the real estate sector.”

Abdullahi said, “One vital thing about building a plaza is that it’s a long-term investment; its value always appreciates. So there is nothing wrong if you don’t make money from it initially. If you build a plaza today and come to sell it in the next five to 10 years you will recover the money you bought the land with, the money spent in building it and also get profit.

“For the developers, building a plaza is not always for quick and handsome returns on investment; it is more about having a haven for storing wealth while avoiding keeping cash or investing it in other businesses with high risks.”

Alhaji Muhammad Abdulazeez Lawan, who recently built a plaza in Kano City, shared his experience with Daily Trust.

 He said, “For me, building the plaza is not to make quick money, but a long-term investment. It is an investment of years and you will receive some amounts on a yearly basis; which is another form of business.”

Speaking on why the cost of shops in the plazas are exorbitant and beyond the reach of most businesses, the business mogul said it depended on the location of the plaza, but noted that the cost of land and building materials contributed to the development.

He explained that, “Nowadays, if you want to build a plaza, you have to close your eyes because it consumes a lot of money; from buying the land to the building materials and the people working in different aspects of the construction. So, it is not easy at all, and you know we don’t easily recover our money. We are talking of spending N200m to N300m, but a shop will be rented out at N200 or N300,000.”

Alhaji Kabiru Umar Shittu said he built his plaza on Ahmadu Bello Way because he was asked to leave his shop inside the Singer Market due to heritage issues.

He said, “I believe that one of the reasons why the plazas are on the increase is because of the risk of losing business. I spent over 20 years in my former shop and I got a lot of wealth and customers. But after the death of the owner of the shop, his children decided to sell the property. The person that bought the place asked us to leave. That was how I lost some of my big customers. But since I had the means I bought a land, built my plaza and I’m occupying a number of shops in it. I now have my shops and stores in one place. The remaining shops have been rented out.”

Meanwhile, many SME owners said the coming of the plazas had opened up chances for them to expand their businesses, noting that the shops, although expensive, had forced them to adapt to modern business trends that were proving more profitable.

Bashir Abdullahi El-Bash, who owns two offices in Al-Hamsad Tower on Zoo Road, said managing the two places was not easy, but that in return he got all that it took him to run his businesses, noting that he even employed other people.

He said, “This place is good and expensive. Every year I have to pay N250,000 for each of the shops. This is aside the money for light. Every day I have to pay N700 for each shop just to get light because I have ACs, while those with only fans pay N350 daily.

“So it is not easy unless your business is running. One of my offices is for my blogging business and the other is a studio for photography. I have seen many people that started businesses here but had to close the shops because they couldn’t afford them.”

Daily Trust further gathered that despite some of the plazas remaining empty for many years, the owners have no fear as they are certain that the investment is meant to last long, while some are believed to be keeping their plazas for politicians to rent during electioneering seasons.

An estate agent, Kabiru Bala, said, “Recently we wanted to rent a plaza for a politician to serve as his campaign office, and the owner said we had to pay N100m for two years. We left and looked for another one. You know it is risky to rent out your plaza to politicians because of fear of attacks; that is why they give them at expensive rates. Some will even say no, that their plazas are not meant for politicians.”