Vaal Mall Developments (Pty)  Ltd has announced that empowerment company Igwa Investments has purchased a 20% stake in the Vaal Mall, in a deal worth R85 million.

The deal was facilitated by Vaal Mall lead owner Sycom Property Fund, which financed the capital costs to completion of the 20% stake in Vaal Mall that was earmarked for a BEE partner in the initial stages of the development.

Patrick Flanagan of Flanagan & Gerard Property Consultants, which co-owns the building along with Sycom Property Fund and Kagiso Property Group, explains that the Igwa Investments deal is an indication of Vaal Mall Developments’ commitment to BEE.

“Our tender submission to the Emfuleni Council included an undertaking to make available a stake in the Vaal Mall – worth not less than 15% - for a local empowerment company,” he explains.

Director of Sycom, Chris Fleming states that: “Although 15% was the contractual obligation, Sycom is conscious of its investment in the community and committed to facilitating truly impactful and meaningful BEE and thus set aside 20% for empowerment ownership.”

The transaction between Vaal Mall Developments and Igwa Investments was facilitated by Afrilink. The final agreement sees Igwa Investments acquiring a 20% stake in the mall, exceeding Vaal Mall Developments’ original stipulations. The stake will be transferred when the R410 million mall opens its doors in April 2006.

“This means that ownership of the Vaal Mall will ultimately be shared between Sycom Property Fund (owning 51%); Changing Tides 91 (Pty) Ltd (14,5%), Kagiso Property Group (14,5%) and Igwa Investments (20%),” Flanagan states.

This is important, he adds, as the spread of ownership distinguishes the Vaal Mall as a truly empowered development. “Kagiso Property Group has acted as our development partners since the initial tender stage, and will continue to own equity in the concluded development. As a result, BEE ownership in the Vaal Mall will stand at 34,5%. That’s one of the biggest stakes in a shopping centre directly owned by black consortia. If true BEE is seen as ownership, we believe this is a significant and powerful BEE transaction.”

Vaal Mall Developments’ efforts at furthering BEE do not end here. According to Flanagan, the company undertook to involve local entrepreneurs, suppliers and labourers in the construction of the mall, with BEE facilitators Sisiziwe Projects providing a comprehensive database of suitable entities.

Furthermore, all selective tenders were put out to the community, creating opportunities for local companies to bid for potential jobs.

“Murray and Roberts Construction employed a great number of bricklayers, plasterers, plumbers and other sub-traders hailing from the area while Theaco Roads, appointed to construct the roads and pavings surrounding the Vaal Mall, also entered into joint ventures with local BEE contractors,” Flanagan attests.

The empowerment ethos will continue after the completion of Vaal Mall’s construction. To assist the communities take skills into the future, Vaal Mall Developments will be sponsoring three students from Vanderbijlpark, funding their studies towards degrees in architecture, quantity surveying and engineering.

Grapnel Property Managers, a division of Grapnel Property Group, which will be responsible from the management and operations of the mall and has committed, wherever possible,  to source and nurture local skills as it seeks to appoint management staff and cleaning and security services.

“This indicates our commitment to skills growth in our country,” Flanagan concludes.

ends

For further information, please contact:

Vaal Mall
Patrick Flanagan
Flanagan &Gerard
Cell: 083 265 5649

or                                                        
Marketing Concepts
Sandy Davey
Tel: 011 880 2213
Cell: 083 453 6668