Orange Farm is poised for development as developers move to explore the retail development potential for the area between Johannesburg and Vereeniging. “This is one of the fastest growing residential areas in the country and very far from formal shopping facilities,” says Steven Herring of Heriot Properties.

“There is strong retail demand. Probably 10% of the Johannesburg population lives in Orange Farm and they must travel to the cities to shop. It’s a growing township and it was only a matter of time before developers started to service this neglected market,” says Herring. The Johannesburg CBD is 45 km to the north and Vereeniging CBD 29 km to the south.

Construction on the 15 000 sqm Palm Springs Mall – Palm Springs is a suburb of Orange Farm – is to start in May 2005 and be completed end October 2005. “The centre can in no way be regarded as second rate. It is certainly a major investment in the area and will have an upmarket visual appeal, featuring high quality finishes and air conditioning,” says Herring.

There is a huge demand for a shopping centre in the area as Evaton and Orange Farm currently has a population of about 400 000 people, which represents about 102 000 housing units. The area is showing substantial growth and is expanding at almost 4% per annum. The number of housing units is expected to increase to almost 110 000 by 2008.  This represents an annual growth of more than 2 000 housing units per annum.
   
“We have secured a large supermarket chain as an anchor tenant,” says Mark Berman of SoundRock Property Consultants. SoundRock is responsible for determining the optimum tenant mix, letting and tenant installation. “The success of any shopping centre depends on getting the right mix of tenants and positioning them correctly. We have already let at least 80% of the centre and have secured a good mix of retailers ranging from full banking services (not just ATMs) to clothing and furniture stores to cellphones, fast food franchises, post office, pharmacy – and even an Internet café is being planned. There will be a medical centre including a doctor, optician and dentist, as well as a hairdresser. We can still accommodate several retailers who will strengthen the strong convenience bias of the centre.”

No development in Orange Farm would be complete without a BEE component. Palm Springs Mall is a joint venture between Heriot Properties (Pty) Ltd and Sakhisizwe Holdings (Pty) Ltd. Says Sakhisizwe chairman Mlungisi Hlongwane: “The people of Palm Springs are very excited about the mall. They have witnessed the growth of surrounding townships and have felt neglected. The R80 million investment is the largest ever into that township. During the building phase temporary jobs will be created, but the contribution to job creation will not only be temporary as jobs will be created by the centre and the skills transfer during construction will assist residents in participating in similar projects elsewhere. There are also ample opportunities for local suppliers.”

“All the national retailers have seen the potential for growing their businesses, but the project will contribute to the upliftment of the entire area along the 25km stretch along the R551,” says Berman. “We see Palm Springs Mall serving as a community centre and a place of convenience. Part of the service provided by SoundRock is to advise potential tenants on the viability of their operation.

“We feel we have a responsibility to the smaller entrepreneurs in the area to give them an opportunity,” says Berman. Hawkers have also been accommodated and they will be provided with ablution facilities and undercover trading areas. It is not the aim of the centre to undermine small business in the area, but to provide opportunities for expansion into formal facilities.

“When developing in township areas the developer makes a far bigger commitment to uplifting the community and upgrading the area. For example, Heriot is bringing electricity from 3 kms away at its own cost,” explains Berman. “Of course, our security systems will be top-level, which is an important consideration for both tenants and consumers.

Heriot Properties are one of few developers with experience in the township marketplace, says Herring. “It is a very specialized niche and Heriot understands the product mix – we developed Park Central, which is the biggest private development in the Johannesburg CBD. We also purchased and developed The Bridge in the CBD.

“What we understand about this market is that it is very aspirational and brand conscious. Retailers who are price conscious do exceptionally well in these developments; the consumers are very informed and shop around a lot. They are acutely aware of price and quality,” continues Herring.

The development has gone ahead with buy-in from the community and the project will employ local construction workers and will draw their staff from the local residents. “On of the most important tenants is a filling station – experience has taught us one of the most important factors in the success of shopping malls is the taxi rank. We are working with the taxi operators – for example, we will not be charging them to use our facilities and we will be assisting them to upgrade their facilities,” says Herring.

The expected turnover of Palm Springs Mall will range between R240 and R300 million per year.

For tenant bookings call Mark Berman
Office: + 27 11 608 1555
Mark Berman: 083 443 1222
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