Retail Property growth in Limpopo serving under-serviced areas

Ken Reynolds, Regional Executive Nedbank Corporate Property Finance

Nedbank continues its commitment to the development of previously under-serviced areas, this time in partnership with Heriot Properties for a new 16 000m² shopping centre in Burgersfort, Limpopo.

“Nedbank Corporate Property Finance has approved R135 million funding for the development of Phases 1 and 2 of the Burgersfort Mall,” says Ken Reynolds, regional executive: Nedbank Corporate Property Finance, Gauteng.

“Burgersfort is well known for its mineral deposits and there are approximately 23 mines in the larger area surrounding the town creating a massive economic injection into the region and Burgersfort specifically.  People travel from as far as 50 to 60km away to do their shopping here and, although the town is relatively small, the catchment area is very big,” he says.

The new mall is on the same road as Twin City Burgersfort and in between the two centres is the main taxi rank. Large numbers of people visit this town on a daily basis and the central part of town where the centre is located, together with the Twin City centre, forms the hub of activity.  It is believed that the new centre will not be in competition to the Twin City centre, but rather they will complement each other.

The development of Burgersfort Mall is on schedule and phase 1 has been 100% let with a very strong tenant profile with the anchor, nationals, national franchise and regional tenants taking up 92% of the total GLA. Larger tenants include Jet, Edgars Express, Mr Price, Joshua Doore, Beares and Pep.  The first phase is a closed mall with Shoprite as the main anchor and other big tenants including Roots Butchery, Express Stores and Studio 88 – all not classified as national tenants but with scores of stores nationwide, predominantly in rural areas.

Phase 2, which is under construction and will be completed in November 2012, will comprise line shops with direct street facing and parking bays, with 80% of the tenants considered national or regional tenants. The two phases are complementary to each other and Phase 1 will open to the public this month.

The deal underscores Nedbank’s commitment to black economic empowerment (BEE) through funding directly to BEE companies and financing projects in previously disadvantaged areas, thereby playing a role to aid and accelerate transformation in South Africa. This strategy has fuelled some exciting developments that establish shopping malls in previously disadvantaged areas where none previously existed. These retail centres also provide employment for community members.

Heriot Properties is a private property holding company with a diversified portfolio throughout South Africa which includes offices, warehouses and shopping centres. Managing director of Heriot Properties, Steven Herring, has a substantial track record in developing successful retail schemes and to date the company has developed 15 shopping centres.

 “Nedbank Corporate Property Finance is the market leader in the commercial property finance industry and we pride ourselves in providing tailor-made financial solutions that uplift and empower all stakeholders and members of the community.  We have previously partnered with Heriot Properties on similar projects such as Palm Springs Mall in the Orange Farm district, south of Johannesburg, Park Central Shopping Centre in the Johannesburg CBD and the redevelopment of The Bridge Shopping Centre in the Johannesburg CBD,” concludes Reynolds.