Property Reporter
THE Score Supermarkets chain is turning black landowners into landlords in a "sustainable black empowerment" drive.
Of the 25 supermarkets Score is opening this year, seven, or 28%, of the buildings will be owned by black landlords or have a strong black empowerment component.
Seventeen of the 123 Score supermarkets in SA are owned by black landowners or have a major empowerment component.
The latest supermarket set up in this way was in Mdantsane, East London, on June 26. The landlord is Madandla Nomtshongwana.
Score Supermarkets and Nedbank Finance Properties are encouraging black landowners with business rights to approach them to ascertain if they meet the location and financial criteria for a supermarket to be built on their land.
The venture arises from an agreement between Score Supermarkets and Nedbank Property Finance about 18 months ago in terms of which the bank agreed to issue 100% bonds to black landowners in locations that met the certain qualifying criteria.
Benjy Sussman, property director of Score Supermarkets, says the group trades in townships and central business districts nationwide.
"In recent years we have faced a lot of questions about who owns the premises in the townships. We own all the supermarkets, but the buildings belong to landlords," he says.
Before 2001, banks had red-lined the townships as "no-go zones". After 2001, Sussman says, township communities asked why so many whites owned commercial properties in traditionally black areas.
The group "went back to the drawing board", and decided that in future developments there would be a black empowerment component to the ownership of the premises preferably a black landowner whose property was suitable for a supermarket.
He says it decided to find a suitable financier to provide finance for landowners to put up the premises for Score Supermarkets.
"We went to see most financial institutions and they were sceptical about providing finance in these areas," says Sussman.
Nedbank Property Finance took a different view and decided to come on board. Sussman says Nedbank Property Finance will not provide for the finance unless Score Supermarkets has a long lease in place to pay back the loan agreement via monthly rentals.
"After the lease period the building is fully paid for and then the landlord sits with an asset that's fully paid for."
Sussman says the system has been a success and is starting to "rejuvenate the townships and create CBDs".
He says the community also more readily accepts a supermarket if it has a black landowner or a black empowerment component.
"Black landowners understand the needs of the people and the processes that need to take place." Sussman says the landowner still needs to qualify for finance.
Jul 23 2003 07:59:24:000AM Nick Wilson Business Day 1st Edition
Publisher: Business Day
Source: Business Day
Turning landowners into landlords.
Posted On Wednesday, 23 July 2003 02:00 Published by eProperty News
Chain opens supermarkets in what were red-lined areas
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