Township shopping centre boom spurs debate

Experts are watching the recent township shopping centre boom very closely with some saying that oversupply may be a problem and that the burgeoning market may have negative effects on other business districts and informal traders.

"There has been growing interest in the township property market over the past five years but the question at the moment is whether the demand is there," said leading property economist Francois Viruly. He was speaking at an Institute for International Research conference on the township market this week.

Viruly said that the amount of available retail space in South Africa's largest township Soweto, which was seeing the majority of retail activity, would quadruple once current projects were completed.

He said a potential problem was that shopping centres in townships would begin to encroach on each other's catchment areas and would then have to fight for customers.

Soweto's Dobsonville Shopping Centre was the only mall servicing the entire township until 2005 when the Protea Gardens Mall opened. This was followed by the Baramall Shopping Centre earlier this year and the Jabulani Shopping complex, which opened last month. The Maponya Mall is due to be completed next year. Experts say once this is built there may be as much as 25% oversupply of retail space in Soweto.

The Eastern Cape has also seen its fair share of investments in this market with multimillion rand malls going up in Mdantsane in East London, New Brighton in Port Elizabeth and Butterworth.

Viruly said while the development of shopping centres in rural areas was uplifting the direct communities, limiting transport costs and creating jobs, it would begin to negatively affect the retail trade in existing central business districts (CBDs) such as Johannesburg's inner city.

"We may be pulling the retail rug out from under the CBD's feet," he said.

City of Johannesburg project consultant Lebo Ramoreboli did not feel that the city's trade would be affected as many Sowetans worked in the CBD and would purchase goods during the week. She said challenges surrounding the retail boom were "creating jobs and converting informal retail trade into sustainable formal trade".

Viruly said that it was important to monitor the situation as Soweto would act as a model for similar developments in townships around the country.

Daily Dispatch

Article by: Thomas McLachlan - www.eprop.co.za