Despite the widespread reports that some major shopping centers in Ghana; West Hills Mall, Accra Mall, and Kumasi City Mall have been sold for US$200 million, Vice President of IMANI Africa, Bright Simons is alleging that such claims are palpable falsehoods.
Bright Simons claims that in addition to the three malls in Ghana, is a fourth one in Nigeria, Ikeja. Together these malls were sold for just $60 million and not US$200 million as broadcasted by the media.
These malls, owned by South African real estate giants; Hyprop and Attacq, Bright Simons alleges were in so much hurry to leave the malls business in Sub-Saharan Africa that they accepted shares instead of cash from Lango, the new buyer.
“First off (no prizes for guessing), the PR that the three Ghanaian malls were sold for $200 million was false. Newsrooms are very busy nowadays, giving free rein to PR agents to push fake news through at a worrying pace,” Bright Simons alleges.
He further continued that, “Attacq and Hyprop’s stakes in the four malls actually all sold for a total of $60 million. Their stakes in the three Ghanaian malls fetched ~$27 million…. The two mall sellers were in such a hurry to leave the Sub-Saharan Africa malls business that they even took their payment in Lango shares, as there was no cash at hand.”
The transaction, Bright Simons describes a huge loss to the seller i.e. Hyprop and Attacq. He explains the original construction cost of the malls is estimated at around US$332 million. At the time of the transaction, the value has dropped to US$179 million representing a depreciation of about 44%.
The malls are also reported to have recorded a total loss of US$37 million in 2023. He adds that considering inflation and the time value of money, these assets have lost over 85% of their value since they were built.
“By the time that Attacq and Hyprop sold the malls last week, the four properties carried a value of ~$179 million, 44.4% less than the total original construction cost of ~$322 million. Selling all their stakes in the four malls for $60 million, net of debt, and in shares rather than cash, implies a steep and dramatic erosion in nominal value over time (much worse in NPV terms). Judging by their valuation curves between 2012 and 2019, the effective erosion of value at the time of the sale exceeds 85% from the base year,” the vice president of IMANI Africa revealed.
The new owner of these malls, Lango, is said to have benefited from the investment of the arm of the World Bank in 2018. The International Finance Corporation (IFC) in 2018 supported Lango with US$40 million to enhance its growth and expansion. Bright Simons is therefore questioning the indirect involvement of the IFC in the investments into luxury malls in Sub-Saharan Africa rather than focusing on poverty reduction sectors like agriculture which have a direct impact on lives.
