Melrose Arch launches R1bn first development phase

Posted On Wednesday, 27 February 2002 03:01 Published by
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MULTIBILLION-rand mixed-use development Melrose Arch officially launched its first phase last week.
MULTIBILLION-rand mixed-use development Melrose Arch officially launched its first phase last week.

The first phase of the development, north of Johannesburg, has 44000m² of offices, 8000m² of retail space and flats.

The launch came with the announcement that Protea Hotels will launch its new brand, African Pride Hotels, at Melrose Arch later this year.

The five-star hotel will incorporate 117 luxury bedrooms and will mainly target business travellers. It will have conference facilities, an auditorium and a restaurant. 'Melrose Arch is what we used to call a town, a space that maximises the convergence of all our daily community needs and individual requirements to work, interact, shop, relax, enjoy nighttime entertainment and socialise,' says Eric Visser, CEO of Sentinel Mining Industry Retirement Fund, which developed the project.

It has been criticised as a 'premature concept', launched in an oversupplied commercial property market. Finding tenants has not been easy.

The development, which will eventually have 275000m² of lettable space, has been launched with a very high vacancy rate, which is expected to persist for months as the market struggles to find equilibrium between supply and demand.

The development has knocked rentals across the northern Johannesburg office market.

The developers had expected Melrose Arch to command rents of up to R110/m², but market realities have dragged them down to about R75/m².

Prominent names on the tenants' list include Andersen, which took 6084m² of space; General Cologne Re Africa in 975m²; National Empowerment Fund, which occupies 1917m²; and Lyndhurst Auto, which is setting up a new showroom on the corner of Corlett Drive and Melrose Boulevard.

The retail tenants include a host of restaurants, among them JB Rivers of Hyde Park fame; Moyos, a Moroccan restaurant; Mr Doner, a Turkish restaurant ; and fusion restaurant FooMoon .

The finished development will be more than four times the size of the first phase. Phase one represents an investment of about R1bn, including infrastructure and roads to support the full development. Once the first phase is fully let, it is projected that more than 4000 people will work in it

Publisher: Business Day
Source: Business Day

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