Bright Simons, Vice President of IMANI Africa, has sparked a discourse on social media with revelations about the real estate dynamics in Accra, particularly in commercial hubs like the Accra Mall.
Mr Simons highlighted the case of a high-end burger joint in the mall that is allegedly facing eviction over unpaid rent and utility bills.
In a Twitter statement, Simons revealed that the burger joint owed approximately $170,000 in rent and $8,000 in utility bills.
The joint, known as Cabo Corso, was reportedly paying a staggering $10,500 in monthly rent.
The case has unveiled insights into the broader Accra real estate market, where rental prices are challenging traditional economic expectations.
Simons pointed out three key insights from the ongoing study:
Rent Driven by Hope, Not Math:
According to Simons, rent in Western-style real estate spaces in Africa, particularly Accra, seems to be more influenced by hope than a sound financial calculation.
The discrepancy between the rent charged and the economic feasibility of businesses operating in these spaces has raised eyebrows.
Delayed Rent Payment Strategy:
Simons noted that the Accra Mall allowed the unpaid rent to accumulate for 16 months, possibly to avoid showcasing too much vacant space.
This strategy, according to Simons, reflects a reliance on hope rather than pragmatic real estate management.
Comparative Rent Disparity:
One of the most striking revelations from Simons’ observations is the claim that mall rent in Accra can be more than 2.5 times that of the United States.
This stark contrast in rental costs has raised questions about the sustainability and economic rationale behind such high rental demands.
In response to Simons’ revelations, Baldwin Thompson-Addo, a data privacy advocate, highlighted the economic conundrum posed by the burger joint’s monthly rent exceeding that of many counterparts in the United States.
He argued that this situation reflects a speculative bubble in the African real estate market, hindering entrepreneurial spirit and market vitality.
Thompson-Addo emphasized the need for recalibration, urging the establishment of a market where rent aligns with economic realities.
He proposed strategic regulatory frameworks, incentivized development, and astute market analyses to guide commercial leasing paradigms in Accra and similar markets.
