With real retail sales for the first quarter of 2012 rising by 1% year-on-year, retailers are anticipating a slow-growth year – in line with decreasing economic prospects in both the domestic and global economies. Nonetheless, expectations are for positive retail growth in 2012 – thanks to key metrics like increasing employment levels, higher real renumeration and lower household debt

Tuesday, 31 July 2012 10:39

Low income retail driving returns

“SA’s lower income market is showing the highest growth in retail demand. Yet formal retail in many rural towns and township markets lags demand, owing to a shortage of quality shopping centres,” says William Brooks, CEO of Synergy Income Fund. This lower income shopping spend is driving higher performance for listed property and IPD research now proves that on a risk adjusted basis, rural/secondary market retail centres are performing strongly

Tuesday, 10 July 2012 10:46

Retail people get together

The International Convention Centre in Durban is the place to be when the largest gathering of retail and retail property people in Africa, with over 1300 delegates, kicks off in September this year with the SA Council of Shopping Centres (SACSC) 16th Annual Congress. The congress is supported by the International Council of Shopping Centres.

West property, Augur Investments and McCormick Property Development, are dreaming of building a 68, 000sqm Shopping Mall in Zimbabwe located in Harare’s up market Borrowdale suburb. According to The Zimbabwean online (UK), this represents the biggest shopping mall in Africa, outside South Africa. The tri-partite investment partners say they used their 'gut feelings' and ocal knowledge in deciding to sink their money into Zimbabwe. That's pretty gutsy indeed!

Mall of the North in Polokwane, Limpopo, has been awarded the SAPOA’s (SA Property Owners Association) Innovative Excellence Award in Retail Property Development.

Sponsored by Nedbank Corporate Property Finance, this award was announced at the 44th annual SAPOA Property Convention & Exhibition at the Durban International Convention Centre

This time around, Jozini, in North-Eastern KwaZulu-Natal, is set enjoy its first large one-stop retail centre when the 18,100sqm Jozini Mall opens in April 2013.

Tuesday, 12 June 2012 00:00

A case of Resillient fishing?

If not in South Africa, where does future expansion lie for the Johannesburg-based real-estate investment company Resilient, which has a local market capitalization of 11 billion Rand?

Despite the World Economic Downturn South Africa has continued to successfully build and fill new shopping centres with both tenants and shoppers. Resilient has been at the forefront zeroing in on non-metropolitan shopping malls outside of the major urban nodes. Towns like Tzaneen, Rustenburg and Klerksdorp come to mind.

Resilient also holds strategic interest in Jabulani Mall in Soweto (55%), Highveld Mall in Emalahleni (60%), 70% of the I'langa Mall in Nelspruit and 60% of the Mall of the North in Polokwane . The firm also owns the Diamond Pavilion in Kimberley and the Tzaneng Mall in Tzaneen. Resilient holds 12.9% of the Capital Property Fund, 22.0% of the Fortress Income Fund – B and 18.6% of New Europe Property Investments plc. It also owns Property Index Tracker Managers, the company that manages the Proptrax exchange traded funds.

Now Resilient is looking to Nigeria for its future. This may have some people worried to see a big player like Resilient apparently ‘abandoning’ the local market. But looking offshore is nothing new to Resilient. Back in 2007 it was involved in the establishment of New European Property Investments, seeing shopping malls being built all over central Europe. The fund was initially listed on the London Stock Exchange, but went on to acquire a secondary listing on the JSE in 2009.

But looking locally, Patrick Cairns for Moneyweb writes: “Resilient's strategy of managing shopping centres outside of the major centres in South Africa has been a very successful one. By focusing on under-serviced areas, the group has tapped into a growth story that has delivered excellent returns.”

Some would say this is due to a variety of reasons: for one, the reduced competitive playing field in small town retail nodes. Secondly shoppers in these towns are less likely to be debt-laden in comparison to their counterparts in urban areas. Increased levels of government social spending have also given more buying power to rural dwellers.This translates into a consumer group with high levels of disposable income available to use at Resilient's shopping centres.

So what’s changed? According to The Citizen’s Micel Schnehage, Resilient’s Director Des de Beer explained that it’s the firm’s struggle with local government. “(Resilient) is hampered by extensive bureaucracy and red tape, resulting in expensive delays.” He went on to state that the era for Resilient to develop non-metro malls was over.

What seems to have been the last straw was the loss of documents pertaining to the Mafikeng Mall by local authorities, 17 times at that! “They’re not accountable to anyone so they don’t really care," said de Beer to the Citizen. It is painfully obvious why some suggest that the facilitation fee (read bribe) was not paid over. Kudos to Resilient if this is indeed the case?

Apparently a partnership with the Sasol pension fund will result in the continuation of the development of malls in Secunda and Bergersfort.

But why Nigeria? Better yields is the short answer. De Beer is expecting returns of greater than 10%, and in dollars too. Resilient believes there is a sincere intention in Nigeria to see the country raised up and that officials are largely positive ‘facilitators’ of that process (excuse the pun). One may wonder if the company is being naive but recent reports of land being donated to developers to ensure development takes place certainly shows intent.

The Financial Mail reports that Resilient Property Income Fund Ltd plans to spend more than 1 billion rand building 10 shopping malls in Nigeria.  The malls, 10,000 square meters and 15,000 square meters in size, will be built over the next three years in the capital, Abuja, and the city of Lagos respectively, the main commercial hubs. Shoprite, Africa’s largest food retailer, will be the major tenant.

Bloomberg reports that Standard Bank Group Ltd, Africa’s biggest lender, and construction company Group Five Ltd. (GRF) are also partners in the deal.

The FM reports that De Beer would like to list the shopping centre fund in Nigeria once it reaches the right critical mass. This would be a similar approach to Resilient’s entry into Romania back in 2007 through New Europe Property.

One can’t help being a little concerned that if a big local player has chosen to go fishing elsewhere what are South Africa’s prospects as far as foreign investment goes? Time will tell.

It seems Africa’s gain is South Africa’s loss. Then again, a rather ingenious strategy of playing reverse psychology with the local property/retail market in order to dissuade competition in SA’s untapped rural markets, could also be at play?

Published in Blog
Tuesday, 12 June 2012 14:39

SA shopping gets social and mobile

Whether resident in Sandton, Senekal or Shoshanguve, the social use of mobile phones is changing the way SA shoppers buy many goods. 

Wednesday, 06 June 2012 12:49

Kenilworth redevelopment aids renewal

A prominent and well positioned site on the corner of Summerley and Main Roads in Kenilworth, Cape Town, is being redeveloped into a prime AAA grade commercial property which is expected to act as a catalyst for urban renewal in the area. Owned and developed by the Pam Golding Property group ‘Pam Golding on Main’ will comprise 4100sqm of offices and retail space, as well as 129 parking bays on two floors of secure, undercover parking. 

Phase 2 refurbishments to Jewel City, a high-security district in the eastern part of the Johannesburg CBD and located adjacent to the Maboneng Precinct, were completed this month

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