Market talk has been that the biggest and swankiest township centre to open its doors to date - Soweto's 66 000sq m Maponya Mall - has had a lukewarm response from local residents.

"Not entirely true," says Zenprop director Adam Blow, who owns Maponya Mall with Soweto businessman Richard Maponya and Investec. "Is every tenant making enough money to buy a Ferrari? No. But the centre is turning over close to R80m/month, which compares well with other regional malls in Johannesburg."

Management's gross turn-over target for the first year of operation was R960m. The centre, which celebrates its first anniversary this week, ended its first year at around the R930m mark. Says Blow: "That's 3% below our projected turnover - which we're not unhappy with, given the current macro-economic environment."

Blow concedes there have been tenant failures. Sportsmans Warehouse closed its 1 000sq m shop a month after it opened its doors and Mr Price plans to cut back its Home store from 1 100sq m to 600sq m.

Blow says nobody expected every one of Maponya's 195 stores would do a roaring trade from day one. "We estimated that around 10% of our tenants would struggle in the first year. Currently, 7% of stores are trading below par - a level we're comfortable with, particularly given that some of those tenants have never traded in a formal retail environment before."

Blow says it's difficult to generalise about what works best in township malls. Upmarket stores aren't necessarily the ones in trouble. Blow says Fabiani hasn't come close to targeted trading density, while Spitz has been a great success. "There's no definitive answer to that. Perhaps it's because Spitz offers credit and Fabiani doesn't. Similarly, the News Café at Maponya is one of the group's top trading stores in SA while Mugg & Bean is battling. One conclusion you can draw is that News Café has a liquor licence and Mugg & Bean doesn't."

But Zenprop takes comfort from the experience with its first township centre, Vangate Mall, which opened in Athlone, Cape Town, in September 2005. Blow says back then some people thought they'd lost their mind because they'd spent a large sum of money on design and upmarket finishes. No SA bank would back Zenprop. Barclays plc, before it took over Absa, eventually stepped in as financier.

Yet the 30 000sq m Vangate Mall was a huge success story from day one and remains one of Zenprop's most profitable centres. Blow says Vangate is currently sitting at an average trading density of R27 000/sq m/year, compared to the industry average of R20 000 to R22 000/sq m/year.

Other players agree that although there's enough disposable income in townships to justify retail development, there are risks involved. "What works in one township won't necessarily work in another. Tenant mix, product offerings and size have to be very site specific," says SA Corporate Real Estate Fund CEO Craig Ewin.

SA Corporate, which has already opened shopping centres in five townships, with another being built, has reported mixed trading results for those centres. Its flagship township mall - Umlazi Mega City, south of Durban - exceeded its turnover targets from the outset when it opened in April 2006. The 35 000sq m mall is currently the top performer in SA Corporate's R5bn shopping centre portfolio in terms of turnover growth.

Des de Beer, MD of the Resilient property group, which has a stake in Soweto's Jabulani Mall, says township shopping centres are generally weathering the current consumer downturn better than their suburban counterparts. "Black consumers have little debt, so higher interest rates don't affect their spending."

However, De Beer notes certain retail sectors are taking strain. For example, at Jabulani there's stress among some takeaway chains. Turnover at stores selling non-essential items, such as homeware and furniture, is also down.

De Beer doesn't believe that townships offer unlimited potential for retail development. Some areas, such as Soweto, may already be heading for oversupply.