The launch of two large shopping centres in Soweto – Jabulani and Maponya – focuses the attention on commercial property investment in townships and rural areas, but listed companies are still wary of previously disadvantaged areas.

The majority of property trusts with retail exposure indicate that they are tracking developments in townships, but few have actual intentions to invest there in the foreseeable future.

Amongst the property trusts, SA Corporate has the biggest retail exposure to such areas due to its take-over of SA Retail.

The fund owns the Hubyeni shopping centre in Elim in Limpopo, Dube Village in KwaMashu in KwaZulu-Natal, Umlazi Mega City and Philani Valley in KwaZulu-Natal and Renbro in Hammanskraal, Northern Gauteng.

Craig Ewin, CEO of SA Corporate, says one of the fund's goals is to provide underdeveloped areas with retail facilities, provided they are commercially viable with favourable rental growth prospects.

Most developments in townships currently have a retail nature.

"It appears as though there isn't much of a demand for office space in townships and industrial land isn't available or suitable for such developments," says Craig Hallowes, spokesperson for the association of property unit trusts.

He says office developments tend to occur in nodes and critical mass is therefore needed to render them viable. The infrastructure in townships doesn't yet support the development of offices at this stage.

However, he mentions that industrial developments are taking place on the periphery of townships, such as in Aeroton in Soweto.

The Emira Property Fund owns 15 retail properties in rural areas, which were bought when it acquired Freestone earlier this year. Some of the properties, valued at R264m, are in Kokstad and Matatiele.

"Even if there are healthy commercial reasons for the investments, which include the high percentage of national tenants and large numbers of shoppers, these investments are still not part of Emira's mandate," says James Templeton, Emira's CEO.

He says the fund is closely watching the townships and rural areas, but has no immediate plans to expand there. "Emira will probably retain its focus on office, retail and industrial space in key metropolitan areas."

John Rainier, managing director of Fountainhead, holds a similar view. "At this stage we are investing in industrial and office space and there is scant demand for office space in townships." – Elma Kloppers, Sake24

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