Small-town dilemmas

Posted On Thursday, 12 May 2005 02:00 Published by eProp Commercial Property News
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A turnaround in retail development is leaving traditional small towns out in the cold.

Property-Housing-ResidentialRetail outlets in small SA towns are experiencing a sharp reversal of fortune. Instead of serving far-flung rural areas, they are now forced to compete with surging township and rural retail development.  "We're seeing a shift of interest towards black consumer markets, urban and rural," says Wayne van der Vent, MD of Futuregrowth, a property fund that targets retail development in previously marginalised areas. 

Towns such as Makhado (formerly Louis Trichardt) and Mogwadi (Dendron) in Limpopo and Newcastle in KwaZulu Natal traditionally supplied food, clothing and furniture to people living around their perimeters. Shoppers would come to Harrismith in the Free State from as far away as Phuthaditjhaba in the former homeland of QwaQwa. 

Now, however, decentralised mall development and rapid urbanisation are luring them away from small towns. Developers have tapped into consumer markets in rural towns such as Thohoyandou, outside Makhado, or in former townships such as Madadeni and Osizweni, outside Newcastle.

"This may take retail to the people," says Sheny Medani, MD of retail research company Market Decisions. "But it also makes ghost towns of places where there once was solid investment in infrastructure and property''.  Take the case of Mogwadi, a small town close to Polokwane in Limpopo province. Senwabarwana (Bochum), about 30 km away, is its former black dormitory town. Today, Senwabarwana is a busy retail destination while Mogwadi is dying. 

"In time, it's likely that Mogwadi residents will start to shop in Senwabarwana," says Medani. She speculates that Mogwadi might one day become a suburb of an expanding Senwabarwana.  But the Mogwadi/Senwabarwana scenario is an exception, says Van der Vent. "They are quite far apart, which means they can compete with one another''. In other, similar places retail development can be mutually beneficial. Piet Retief, says Van der Vent, has seen wide integration of shopping patterns as retail across the town has consolidated. 

"The key is proximity," he says. "If the town and the township are close, they can't compete positively."  Towns most at risk of dying are those created for apartheid, such as Bisho in the Eastern Cape, which is being absorbed into King William's Town.  Decentralised malls can also destroy the centres of small towns. Medani cites the Western Cape's Worcester and Paarl, where such developments are in the pipeline. "These would be welcome if the market could feed existing as well as out-of-town retail outlets, but this often isn't the case''.

But Medani believes there are solutions. "Small towns need to foster mixed-use, vibrant CBDs with a focus on housing and social infrastructure''.  So Harrismith could reverse retail degeneration by creating inner-city housing and schools, and by attracting developments that encourage a live-work-and-play lifestyle.  But small towns will have to work on getting buy-in from retailers.

"If the national chains are reluctant to come into small towns," says Medani "independent retailers should try to offer better differentiation''.

Last modified on Thursday, 22 May 2014 14:20

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