Old Mutual Property would raise the value of property assets under management by up to R9bn over the next five years, CEO Ben Kodisang said on Friday.

The property manager also planned to fund new development projects worth R5bn in addition to those worth R2,5bn already under way, he said in Cape Town.

Current and planned projects included office and retail complexes, such as the large mixed-use development in Midrand that would eventually cost R20bn.

These investments were aimed at taking advantage of the expected economic boom, which the Reserve Bank said last week was already being driven by a consumer-led recovery.

Old Mutual is one of the largest property managers and owners in SA with Liberty Properties and Growthpoint Properties as rivals. Last week, it scrapped the planned listing of its R12bn Triangle Real Estate Core Fund citing changing market conditions.

"Our current assets under management (are worth) R26bn and we hope to increase that to R35bn over the next five years," said Kodisang at the sod-turning ceremony at a high-rise office complex in central Cape Town.

Old Mutual and banking group FirstRand will jointly fund Portside with R1,6bn, set to be the tallest building in Cape Town, said FirstRand CEO Sizwe Nxasana.

It would host the provincial headquarters of First National Bank, Rand Merchant Bank and vehicle financier Wesbank.

Additional offices would be leased, said Nxasana. Kodisang predicted these would be fully let by the time of the building’s completion in March 2014.

Kodisang said the focus on retail and office complexes was a sign of confidence in the recovery of the economy.

He admitted there had been an increase in vacant offices as companies scaled down due to tight economic conditions.

But he brushed aside such concerns about shopping complexes. Old Mutual Property would focus on quality tenant selection.

Securing the tenancy of anchor tenants, such as the major retailers, was key to the success of any retail property development.

Besides, he said, retail was a defensive sector even during downturns food retailers managed to survive.

Kodisang said Old Mutual Property had a healthy pipeline of projects under development or planned in SA. "We have around R2,5bn under development, including Portside, with planned developments (valued at) around R5bn," he said.

Current and planned developments included the expansion of Pretoria’s Menlyn shopping complex, an office and retail complex in Rosebank, and the Midrand mixed-use project comprising office, retail and accommodation units.

The project — to be built over 350ha — would start once the necessary town planning and zoning approvals had been given, he said, without indicating when these would be obtained.

"There are a lot of things to be done before we press the button (to start construction)," said Kodisang. However, he said, preliminary indications were of a good demand for retail space from key tenants. The continued expansion of the project would be "demand-driven".