The complex, whose initial ambitions raised a few eyebrows, is set to finish phase 1A in September, when the Virgin Active gym opens its doors.

All 8000m of retail space has been taken and retailers say trade is doing well and growing steadily.

Nicolas Kiros, manager of restaurant JBs Corner, says business has been much better than expected. Melrose Arch is culturally diverse. I've got people from all walks of life coming in.

Larry Levenberg, general manager of coffee shop Cafe Nescafe, says they are sometimes busy until five o'clock on Sunday morning. Lots of people come here because of the security.

Nearly all the 44000m of office space is let. Tenants include GeneralCologne Reinsurance, KPMG and the National Empowerment Fund.

Industrial group Bidvest moved its head office there about six months ago, taking over two buildings. Graham Wilson, who is in charge of the precinct design and co-ordination, says: Once people started to realise what Melrose Arch was all about, their attitudes changed. It helped to have a couple of big names establish their head offices here. Melrose Arch's coup, as Wilson calls it, was getting Stanlibs head office. The company moved in last December.

In March, the five-star, 118-room Melrose Arch hotel opens its doors. Part of the African Pride Hotel & Lodges group, this is the sole hotel in the complex. African Pride MD Stan Evans says the hotel will aim at corporate travellers, especially those visiting offices in Melrose Arch, and leisure travellers.

The first residential section 34 upmarket two- and three-bed units is expected to be complete by the middle of next year. Wilson says the projected tenants are empty nesters singles and couples whose children have moved out. We have not started selling yet, he says, but we have already built up a substantial list of interested individuals. Residents flats will be maintained by the hotel staff.

Things were not always so positive for Melrose Arch, the brainchild of Mike Cullabine, who is general manager of the Sentinel Mining Industry Retirement Funds property division.

Sentinel, the sole owner of Melrose Arch, began assembling properties for the complex in 1992. Four years later, it approached Osmond Lange Architects, of which Wilson is a director, to create a masterplan. The retail and office spaces were built simultaneously, after surrounding roads had been upgraded.

Rumours abounded about rentals being so high as to price themselves out of the market. The loss of auditors Ernst & Young worsened matters.

In a sense, Ernst & Young were too early, says Wilson. This is not a standalone office development. We were putting together a town in essence and it was not possible to commit to operating costs at that stage.

Following that disappointment, Melrose Arch signed another major tenant: global auditors Andersen. Signing them was a great boost and confirmation that we had correctly predicted the needs of our target market, Wilson says.

Andersen took occupation in November 2001, but within a couple of months the accounting firm started collapsing after the US part of the firm became embroiled in the Enron scandal. This could have been devastating for Melrose Arch. But KPMG, which merged with the South African arm of Andersen in June 2002, chose to keep the Melrose Arch lease.

In April 2001, Investec property group came in to manage the precinct. The signing of tenants such as Harmony Gold and the Bond Exchange brought further credibility.

Completion in mid-2004 marks the end of phase one of development at Melrose. The remaining phases will be rolled out according to demand.

Business Times