THE developers of the R800m Capegate mixed-use development in Brackenfell, Cape Town, say it is another sign of financier confidence in the South African property market, particularly by the retail sector.
It was announced at the weekend that Nedbank was providing the loan financing and had bought a 40% stake in the R400m regional retail complex, and 33% of the R48m Lifestyle centre in the complex.
Construction on the Lifestyle centre is nearing completion and will be completed in September. Construction on the rest of the development begins in September and will be completed in March 2005.
The retail centre will be the flagship of the mixed retail office and residential precinct.
Jaco Odendaal, one of the Capegate developers, says they have finalised a deal with wholesale group Trade Centre for 10000m² of space.
Pick 'n Pay are taking up 4500m², Checkers 4500m², Woolworths 3300m², Edgars 4000m², Foschini Group 2200m², Mr Price Group 2200m² and Truworths and Clicks Groups 1000m² each.
A number of questions were raised about the viability of Capegate when planning started seven years ago.
Odendaal said there were certain expectations as far as residential growth was concerned and the question raised at the time was whether it would be sustainable. He said according to the demographic studies conducted by researcher Urban Studies, growth of more than 1000 residential units a year was projected for Capegate's catchment area.
"The big question mark was whether the growth that was projected would be achievable. Our centre was planned at 33000m² initially and we are developing it to 48000m² based on the support we received from national retailers," he said.
Odendaal said another big question was whether the proposed infrastructure in terms of roads and bridges could be realised. "That has also happened over the last few years."
He said the developers were confident Capegate would be a success, saying this hinged on the support of national retailers. Interest rates were falling and retailers were rushing to expand their presence throughout SA.
He said this was transforming the property market to a new era of confidence, not seen in SA since the 1960s.
He said the listed property sector was growing fast and institutions were rebuilding their holdings, so eventually finding a long-term buyer for Capegate would be easier than in the past.
"This reduces the risk profile of centres like ours. And the banks want equity to double returns on properties that they are taking the loan risk on anyway."
Odendaal said the Cape retail market was on track and that the turnovers of all major centres were improving steadily.
He said the first units in the residential precinct were launched in June, with sales well above expectations.
Aug 12 2003 07:36:49:000AM Nick Wilson Business Day 1st Edition
Publisher: Business Day
Source: Business Day
Capegate a sign of trust' in SA market.
Posted On Tuesday, 12 August 2003 02:00 Published by eProperty News
Centre expected to be ready by 2005.
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