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Carving up the Cape

Posted On Wednesday, 14 August 2002 10:01 Published by
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Cape Town's northern suburbs are to get yet another regional shopping centre to compete with Canal Walk, Tyger Valley, N1 City and an array of smaller centres
By Ian Fife

Cape Town's northern suburbs are to get yet another regional shopping centre to compete with Canal Walk, Tyger Valley, N1 City and an array of smaller centres. Sheer gluttony, argue some. But retail sales at the existing centres show that developers may have as much sense as greed (see table).

Capegate, a 33 000 m² centre, needs at least R360m/year turnover. Easy, says researcher Urban Studies. That means only 1% of the R32bn/year that shoppers spend in the region. And their spending grows by up to three times that much each year.

Some centres will lose customers when Capegate opens in 2004, mainly Tyger Valley, which is only 12 km away. But it should not lose more than 12% of its turnover, leaving it with R1bn/year in sales.

Jonothan Yach, chief researcher at Broll, Tyger Valley's managers, isn't worried. 'We expect shoppers to increase their spending by more than what Capegate takes.'

Capegate developer Jaco Odendaal says the centre will be part of a 280 000 m² residential, office and retail complex on 60 ha. It will be partly financed by Cape of Good Hope Bank . Total development cost will be about R800m and Pick 'n Pay will be an anchor tenant.

Financial  Mail


Publisher: Financial Mail
Source: Financial Mail
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