Billion Group has been given the green light to build East London's regional shopping centre ahead of three other property groups.

Construction on Billion Group's 72000m2 shopping centre, situated next to Hemingways Casino, on the border of Cambridge and Vincent streets, has already begun and it is expected to be completed in 2009.

The project is valued at more than R1bn.

Billion Group's Hemingways site was the preferred choice of the East London city council and national retailers.

Also bidding for the regional shopping centre were Investec Property Group, which acquired a site for a shopping centre in Gonubie; Zenprop, which acquired a site in Beacon Bay; and Atterbury Salinga Consortium, which proposed a centre about 1,5km away from Investec Property Group's proposed site.

There was general market consensus that East London could support only one regional shopping centre, which meant that only one of the four proposed centres would go ahead.

All of the competing property groups agreed that SA's national retailers would ultimately decide where the shopping centre would be built.

At the time, Buffalo City's development planning department said it favoured a central location.

The proposed development considered to be the most central was Billion Group's Hemingways site.

Gavin Tagg, retail consultant for the Hemingways Mall, says Billion Group's site was finally chosen as the best site by "the retailers and council".

"At this stage we are 75% let and that's with all the big national retailers. Now we are starting negotiations with the line-shop tenants."

He says a regional shopping centre of this nature will dominate the Buffalo City municipal region.

Investec Property Group executive director Ronnie Sevitz confirmed that Investec Property Group's proposed regional shopping centre in Gonubie had been shelved.

"Our assessment at the time was that only one regional shopping centre would fly in East London. Hemingways got the nod from the retailers.

"There really wasn't any point in pursuing what we thought was the better site," says Sevitz.

He says Investec Property Group has been examining alternative uses for the land.

"At this point the process is being run by our partners Thynk Property Group. They are running with it and they have come up with a few ideas but we have not decided what to do yet," says Sevitz.

Zenprop says it shelved its regional shopping centre plans for Beacon Bay six months ago.

"Once there were three sites being mooted there was divided preference for the sites from the essential national retailers.

"It appeared that we would not have a dominant centre and the market would be diluted, and that does not fit with our criteria for investment in shopping areas," says Zenprop CEO Rodney Weinstein. 

Business Day