SA Retail Properties Ltd is again boosting its assets in under-serviced communities with the R90 million development of a neighbourhood shopping centre in Umlazi, Durban.

This will be the second Umlazi investment in a year by SA Retail which will become part of a R7 billion portfolio when its acquisition by SA Corporate Real Estate Fund is finalised soon.

The development of Philani Valley Shopping Centre follows last year’s opening of Umlazi Mega City, a R165 million joint development with SA Corporate, the R42,8 million acquisition of Dube Village Mall in Kwa-Mashu, Durban, and the purchase of Hubyeni Shopping Centre, now under construction at Elim, Limpopo, for R88 million.

Peter Sparks, managing director of SA Retail, says the Philani Valley centre has strong community backing and will serve the needs of Umlazi residents beyond the catchments associated with Umlazi Mega City.

“In particular, it will serve the 4 000 families in sections U and Y, as well as residents on either side of motorway 35 from the intersection of main road 35 and the Winkelspruit- Pietermaritzburg roads all the way eastwards to Isipingo.”

“Their shopping has been traditionally in the Durban CBD, Isipingo and Prospecton and has meant lengthy round trips by car, bus and taxi to bring purchases home. Because of the topography in the area and lack of road links, Umlazi Mega City is also a lengthy trip.”

Sparks says community needs have been recognised in strong demand for space in Philani Valley centre, with national tenants already accounting for 75% of space in the first phase of 32 stores over 10 900m².

“The centre has a projected initial yield exceeding 10,0%. It will be anchored by a 2 600m² SuperSpar and has attracted commitments from Build it, the Post Office, MTN, Vodacom, Lewis Group, Ithala Bank, Africa Bank, Tops, KFC, Chicken King, FNB, Pep, Standard Bank and Shell. The leasing team is confident of securing 100% tenant commitment before the proposed centre opening in December 2007.”

With a second phase of 2 000m², Philani Valley centre will have a total lettable area of 12 930m² and parking for 234 cars. It will also house a separate service station site.

Sparks says the Philani Valley development will not materially affect the geographical spread of the SA Retail portfolio. It is increasing its weighting of Gauteng and Cape properties through the acquisition of 10 properties worth R1,025 billion from a portfolio administered by Sharemax Investments.