But Growthpoint Properties, the largest listed property company on the JSE and a large retail property owner in the area, is concerned that three more retail developments on the cards may create an oversupply in the area.
With a successful regional shopping centre, Waterfall Mall, already up and running, developer Quantum Development Projects, headed by Hennie Burger, is planning a R750m retail and office development next door.
According to Shopping South Africa, the official journal of the South African Council of Shopping Centres, the new development is to have 18000m? of office accommodation and about 54,000m? of gross leasable retail space, to be built in two phases with the first phase occupying about 20,000m?. The balance will be built in the second phase.
The Waterfall Mall and its adjacent value centre are owned by Growthpoint Properties.
Burger says the new retail development, which will be a lifestyle centre offering big-box retail space for retailers such as Hi-Fi Corporation, will be complementary to existing retail offerings in the 490,958m? Waterfall Mall and the 10,274m? value centre.
Quantum Development Projects already has its rights in place for its development.
Applications for two further retail developments of more than 40,000m? each have been made to the municipality by two other consortiums. Both Growthpoint Properties and Quantum Development Projects are opposing these two applications.
Stephan le Roux, fund manager of Growthpoint?s retail property portfolio, says the Waterfall Mall has been trading exceptionally well over the past three years but that it does not necessarily follow that other retail developments will enjoy similar success.
Total sales at Waterfall Mall showed year-on-year growth of 28% in July.
Le Roux says the success has been off the great run of the platinum mines in the area.
"The mines are aggressively employing people. The increased profits being made by the mines must filter through to the pay packages of employees."
Le Roux says there has also been a lot of residential development in the Waterfall Mall node in Rustenburg on the back of strong demand. "A lot of it is high-end property with some units selling in excess of R2m. Rustenburg has been a boom town for the past three years in tandem with the commodities cycle."
But Le Roux says that looking at the developments being mooted for the area, Growthpoint believes the Waterfall Mall is the dominant shopping centre with representation from all the national tenants.
"During our development phase over the past two years we've addressed the space need of national retailers and we?ve increased the size of others."
The centre's retailers include Pick 'n Pay, Edgars, Truworths, Foschini and the Mr Price Group, among others. Growthpoint has also brought in new retailers such as the Pep Stores/Ackermans Group, as well as specialised tenants such as Incredible Connection and the Cape Union Mart.
"The only sector under-represented is the furniture retailers. In our view, and this view is supported by our retailers, the existing retail footprint is serving the demands of the market and there will be no duplication of existing brands," says Le Roux.
Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge
