Menlyn set to become largest mall in Africa
BY ALISTAIR ANDERSON, 04 AUGUST 2016, 06:01
Menlyn Park, Pretoria, is quietly becoming the largest shopping centre in Africa, usurping Durban’s Gateway Theatre of Shopping. It is also set to be larger than iconic shopping centre, Sandton City in Gauteng, and the recently opened Mall of Africa, also in Gauteng.
South African shoppers’ faith in large retail centres is unabated, and many people are choosing to visit malls once or twice a month, doing all of their shopping, as opposed to visiting many small malls many times in a month.
Menlyn Park, which is owned by private company Pareto, is being extended by 50,000m² through a project that cost about R2bn. The super regional mall will be 169,253m² in size by November 2016, and contain about 500 stores. Certain parts of the mall are also being refurbished.
Twelve concierge ambassadors have been appointed to help shoppers and minimise inconvenience.
“Giving our customers the opportunity to benefit from the expertise and knowledge from our personal shoppers is just another way we strive to make Menlyn Park Shopping Centre a cut above the rest,” said Andrea de Wit, marketing manager of the centre.
She said Pretoria was home to more than 70 embassies and consulates — the second-highest concentration of these institutions in the world, after Washington DC.
Pretoria also had the fastest-growing annual GDP in the country, and one of the country’s youngest populations.
“With these busy people in mind, Menlyn Park offers customers a private consultation with one of two highly experienced personal shoppers in order to best take advantage of the 275 stores and brands available at the centre,” she said.
Pareto’s shareholder is the Government Employees Pension Fund. Pareto is also the full owner of Cresta shopping centre, Southgate Mall and Value Market and Westgate shopping centre in Gauteng, the Pavilion in Durban, and Mimosa Mall in Bloemfontein, while it jointly owns the Tiger Valley shopping centre in Cape Town.
The suburb of Menlyn is seeing new and redevelopment, with new office parks also under construction. It is viewed as the “Sandton of Pretoria”, according to Ulana van Biljon, chief operating officer of Emira Property Fund.
Emira is a dominant owner of property in Menlyn. In March it spent R 403m on a 50% share in five buildings in Summit Place, a new office development. “We really like Menlyn as a node. We see it as the Sandton of Pretoria and will continue to invest in this growing area for years to come,” said van Biljon.
Gateway is now SA’s second-largest mall, at 166,636 m² and contains 362 stores. Sandton City follows next: it is 146,803 m² and has about 300 stores. Canal Walk is the largest shopping centre in the Western Cape, at 140,567m², with 412 stores.
Mall of Africa, located in the recently constructed Waterfall City in Midrand is 130,000m². It has about 300 stores. It is, nevertheless, the largest mall to be built within a single phase. Durban’s The Pavillion is the next largest mall in SA, given its 120,000m² size. It is followed by Centurion Mall and Cresta, which are 105,000m², and 104,000m² respectively.
These shopping centres are all much smaller than many others in the developing world. SM Prime Holdings’ Mall of Asia in Pasay, Philippines, is being extended from 400,000m² to 700,000m² and is set to have 1,300 stores.
Stanlib’s head of listed property funds Keillen Ndlovu says the Mall of Dubai in the United Arab Emirates is about 502,000m².
In the rest of Africa, Egypt’s Cairo Festival City Mall boasts 168,000m² of space, while the Mall of Arabia, also in Cairo, has about 180,000m² of gross lettable area.
There have been concerns that SA is over-shopped and that too many malls are being opened, but landlords have found that many shoppers are choosing to visit larger centres once or twice a month instead of many smaller centres multiple times.
Smaller convenience centres struggled to hold on to small tenants, said Patrick Flanagan, head of development company Flanagan & Gerard.
“I think developers need to be careful. There are many shopping centres that have been announced which just won’t be sustainable in certain areas. Quite a few smaller centres are difficult to tenant in a slow-growth economy,” he said recently.
There are about 40 shopping centres sized 20,000m² or more that have been announced or are in production in SA, according to the Southern African Shopping Centre Directory of 2015.
This number will be updated when the next directory is released in 2017.
It normally takes developers a few years to plan, construct, and open a shopping centre, according to Finlay & Associates MD, Marianka Victor.
She said that developers tried to pre-empt how customers would perform years in advance. Malls are built to last a long time and through economic cycles, according to Victor.
She also said that developers looking a few years down the line were shifting their focus to small and convenience shopping centres, especially in rural or semi-rural areas, as demand increases in these historically undersupplied areas.
Victor said many of the malls she and her team have been managing are between 4,000m² and 8,000m² in size.
The company’s largest project was a new 20,000m² centre in Botshabelo in the Free State. “The Botshabelo mall is the largest mall in that rural area. It’s already 85% let,” she said. A major reason for developing the mall was that Botshabelo was an under-supplied town.
Flanagan said it made sense that developers had found opportunities in rural areas. These developers needed to be careful not to develop at the expense of existing urban centres, however, he said.
“A number of rural communities do not have the facilities, infrastructure, and development, including shopping, that allows them to be economical with their time, transport and other costs. These communities generally travel to more powerful nodes to fulfil their requirements.
“The result is likely to be that more centres will be developed to cater for these large rural communities and this will put further pressure on the more established urban areas, as the rural folk will no longer need to visit these remote, to them, locations and centres. All the more reason that care should be exercised by all involved in developing and investing in shopping centres in urban environments,” Flanagan said.
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