Groups vie to build East London shopping centre

Posted On Thursday, 14 September 2006 02:00 Published by eProp Commercial Property News
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With three different property groups competing for the chance to build East London’s regional shopping centre, Buffalo City’s development planning department says it favours a site that is centrally located.

Gavin TaggThe proposed development considered the most central is next to Hemingways Casino, on the border of Cambridge and Vincent streets.

There is market consensus that East London can support only one regional shopping centre, which means that only one of three proposed shopping centres will be able to go ahead.

The Billion Group has acquired the site next to Hemingways Casino, while Investec Property Group has acquired a site for a shopping centre in Gonubie. Zenprop has acquired a site in Beacon Bay. The three players each believe their site is the best location for the centre.

But all agree that it is SA’s national retailers which will ultimately decide where the shopping centre will be built.

The Buffalo City council will make a decision on which development to support, on the merits of the three applications, either late this month or early next month.

But the municipality’s director of development planning, Craig Sam, says the city is “looking at a site which is centrally located and acceptable to all different urban components of Buffalo City”, such as King William’s Town, Mdantsane, East London, Beacon Bay and Gonubie. “It must serve the surrounding towns in the broader hinterland — including Stutterheim, Butterworth and Mthatha,” says Sam.

As far as the planning department is concerned, he says, the Hemingways site is the most central one. “That is the site which makes sense from a city planning perspective.”

But he says that the city council cannot decide where the shopping centre is ultimately established and this depends on where the retailers want to go.

Sam says the Hemingways site, which is next to the N2 highway, would increase the reach and size of the central business district in East London. “You are going to have development along a centralised axis and we can see spin-offs happening already. The City Lodge has already located along this axis, which is the Oxford-Union Street and Western Avenue axis.”

Sam says the Hemingways site has “high visibility and it obviously creates this node of development” with the casino and entertainment centre already in existence.

“We don’t want dispersed development. What we are going to do now is take the three applications to council and then council will make a decision on the merits of three applications.”

But Rodney Weinstein, executive director of Zenprop, which hopes to develop a shopping centre in Beacon Bay with an East London partner, says they have canvassed the key players in the retail industry and they are “convinced the Beacon Bay site is the correct site for a sustainable centre of this nature”.

“We are planning a centre of about 30000m² which, combined with the (existing) Beacon Bay shopping centre, makes obvious sense for establishing a dominant regional node. The Beacon Bay centre already has an established trading pattern and has proven itself commercially as a viable and sustainable node.”

Weinstein says Zenprop’s site already has “access” and that market surveys have shown that “market capacity for the centre is there”. He says Woolworths has already committed to the site.

Investec Property Group executive director Ronnie Sevitz says the Gonubie site can give the “best offering to consumers in terms of access, in terms of size and facilities”.

“We believe the growth and expansion of Buffalo City is in that direction. A regional centre is not a centre for a year or two. It’s … the next 20 years at least.”

He says that thousands of residential units are also being planned in the Gonubie area and that the area is in a growth phase.

“The centre of East London is catered for. They have Vincent Park (shopping centre) and that is being expanded by Old Mutual. I believe the retailers will follow us. The only one we’re not negotiating with is Woolworths. I believe they are backing the Zenprop site,” says Sevitz.

He says the retailers will have the final say on where the regional shopping centre is established. “They will look at where the growth is. Retailers spend huge amounts … and they have to see where they’ll get the best return.”

Gavin Tagg, MD of Retail Network Services, the retail consultants to the Billion Group, says it is “time for retailers to act responsibly in consultation with the city planners in determining which is the best site for the entire region”.

“The retailers which have shown keen interest to support that view are Pick ’n Pay, which is considering a 12000m² store at Hemingways, as well as the Edcon Group, which has given us its full support,” he says.

Tagg says that he sees the Hemingways business node developing along the same lines as Umhlanga Ridge around the Gateway shopping centre in KwaZulu-Natal.

Last modified on Thursday, 15 October 2015 15:00

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