21 Oct 2011
The South African retail property market returns remained resilient recording 0.4 percent of capital growth in the first six months of the year.
According to the South African Property Owners Association (Sapoa) and the Investment Property Databank (IPD) South Africa Biannual Property Indicator, overall, commercial property returns stagnated in the first half of 2011.
Retail vacancies are currently 6.4 percent. The report stated that the upturn in property returns was supported by a number of economic factors including a return to retail sales growth, improved manufacturing output and a small rise in business confidence.
The Western Cape recorded the strongest retail returns according to the report.
Where others see loss some retailers see value and opportunity to tap into township retail markets.
The Protea Glen Shopping Centre in Soweto, south of Johannesburg has seen retailers moving quite quickly to secure space in the 30 000 square metre complex.
Described as the fast-growing trade area, the shopping centre is located at the nexus of Protea Boulevard and the K15 highway – the main arterial between Lenasia and Krugersdorp.
The R360 million centre is the only retail destination in this area of budding residential development.
It is also on the doorstep of a recently-completed R50 million sectional title residential development with a planned second phase already in the works, says Mike Nkuna developer of Masingita Property Investment Holdings
“We recognise the enormous potential for growth in the area, with the highest purchasing price in Soweto,” says Nkuna.
Alf Levin of Township Realters says more than 20 000 affordable housing units have already been built in Protea Glen and another 15 000 in the construction or planning phases.
The 2 000 sectional title units around the new shopping centre along with a new 130-bed private hospital and Grace Bible Church are expected to stimulate even more residential growth.
This is in addition to 27 000 new houses at Lufhereng next to Protea Glen and 35 000 new houses being planned for the southern side of the N12 next to Lenasia, says Levin.
“The steady pace of leasing at the centre confirms that retailers recognise the centre’s potential.”
Leasing specialists Retail Network Services (RNS) have already signed up a 3 500 square metre Shoprite and a 3 500 square metre Pick n Pay to anchor the new centre scheduled to open on 27 September 2012.
RNS has been involved in centres including Pan Africa Shopping Centre in Alexandra, Johannesburg, Edendale Mall in Pietermaritzburg, Mdantsane City in East London and Tsakane Mall in Springs, Gauteng.
The company is also familiar with the unique character of the Soweto retail market, with the successful leasing of Jabulani Mall under its belt.
The centre will have a selection of 90 stores in total when it opens.
He adds that there is currently an outflow of residents to other shopping nodes because of the lack of retail options in Protea Glen and surrounding areas.
“Most of the residential growth is in formal housing in the C and D household income categories,” says Tagg.
“What’s more, that growth is consistent and we’re seeing ongoing investment that builds a stable community with increasing consumer expenditure,” he adds. – Denise Mhlanga
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