SA Retail eyes R100m in projects

Posted On Thursday, 02 September 2004 02:00 Published by eProp Commercial Property News
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Considering investing R100m in two expansion projects within its portfolio

Property-Housing-ResidentialSA Retail Properties, a retail focused listed property loan stock company, said yesterday that it was considering investing R100m in two expansion projects within its portfolio.

SA Retail Properties MD Peter Sparks said earlier this week that the confidence levels of retailers were high, and the company was expanding a number of its shopping centres to cope with the demand for space.

Sparks said SA Retail was "well-advanced" in planning expansions to both the East Rand Galleria in Boksburg and Highland Mews in Witbank.

SA Retail and listed property unit trust Martprop both own a 50% interest in the Highland Mews centre.

Sparks said the total capital to be invested in both these projects exceeded R100m.

"Tenant demand is certainly driving extensions to our major shopping centres," he said.

SA Retail and Martprop were also each spending R20m on redeveloping the Tokai Shopping Centre in Cape Town, said Sparks. SA Retail and Martprop both own a 50% interest in the centre.

Colin Young, the fund manager of Old Mutual's South Africanlisted property funds, said this week that the 22-year low in interest rates was among the factors supporting the retail boom.

Young said the low interestrate environment had a big effect on disposable income.

This, together with a strong rand and the resulting cheap imports, was driving the retail sector growth, he said.

Most retailers have huge expansion plans, and the market can expect more smaller shopping centres of 15000m² to 30000m², said Young.

He said he thought there would continue to be a shortage of community and neighbourhood shopping centres in the next 12 months.

Developers are also in a strong position at the moment.

Building statistics from Statistics SA indicate developers are focusing almost entirely on residential and retail developments.

Among the listed property funds involved in retail expansion drives are Hyprop, Grayprop, Growthpoint and Acucap.

Retailers are not just looking for space in existing shopping centres. They are also casting their eyes about for new retail developments.

Young said that a new phenomenon had emerged with private developers, reluctant to sell the assets and creating their own funds.

If they do sell they ask exorbitant prices, making it more difficult for listed property funds to buy these assets.

Last modified on Monday, 12 May 2014 19:05

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