Brackenfell redevelopment optimism

Posted On Friday, 15 February 2002 03:01 Published by
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Ari Efstathiou is another developer in Cape Town's northern suburbs who is defying his critics. He has bought the 23 000 m² Brackenfell shopping centre and is expected to spend R30m redeveloping it.
Ari Efstathiou is another developer in Cape Town's northern suburbs who is defying his critics. He has bought the 23 000 m² Brackenfell shopping centre and is expected to spend R30m redeveloping it.

This is foolhardy, say his detractors, given the four regional shopping centres a short distance from his development.

Efstathiou is new to property, but has been in retailing for more than a decade through family interests in Steer restaurants' Western Cape franchise. He developed an appetite for property five years ago, when he built The Gallery in Montague Gardens, a 5 600 m² centre whose tenants include a Steer operation. He then bought a 4 600 m² property, Bellville Mall. By April, when he has converted Brackenfell, his portfolio will be worth R120m, he says.

Critics believe Efstathiou will put this portfolio at risk by redeveloping Brackenfell. When he bought the property last year for R20m, he would probably have agreed with them. 'My idea was to convert the property into an office park,' he says. But he then discovered the centre's biggest tenants - Truworths, Mr Price, Shoprite and Jet - did not want to move out. They insisted trading was fine.

Efstathiou says his initial 18% yield on completion will be the same as he is currently getting - even with 3 500 m² of trading space vacant. 'The investment will give me a centre that has 70% national tenants and fresh potential for some decades ahead.' The renovated centre has more tenants ready to sign than it has space available.

Its future, he adds, is underpinned by the 40 000 new families predicted to move into his primary target area at the rate of 2 500/year.

Publisher: Financial Mail
Source: Financial Mail

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