Soweto mall mania

A northern Johannesburg suburbanite might be forgiven for not thinking much of the new Signet Terrace shopping mall, which opened in Lenasia last October. It looks pretty much like any one of the strip malls you’d find in Douglasdale or Fourways.

A light face brick, crescent-shaped structure designed by Mentrax Associate Architects, it faces out towards the Lenasia CBD and features anchor tenants like Shoprite, Ackermans, Jet, Morkels, Ellerines and food outlets such as Milky Lane and Fishaways.

However, what to jaded outside eyes may seem perfectly normal is in fact the result of five years of intensive planning, extensive market research and a partnership between developers Silverbird Property Development and retail consultants Retail Network Services (RNS). It’s also the single biggest investment in Lenasia to date.

Says Gavin Tagg of RNS: ‘We’re retail consultants, so we look at the big picture from the start. First, it’s about market research: what market potential is there, what do consumers want? It’s then a matter of us briefing the architects, giving the right retail layout and the design for the shopping centres. Then we market the space, get the right tenants in and anchor them in the right places, along with all the admin and the feasibility studies.’

In the case of Lenasia and the Signet Terrace development, Tagg says: ‘Initial research showed that about 22 per cent of business was being retained in Lenasia; the rest was going out and people were spending their money elsewhere because the suburb didn’t have the facilities. None of the national chains could get in because nobody would sell properties to them and the properties weren’t big enough to accommodate the numbers.’

To compound the problem, financiers were unwilling to come to the table until Absa stepped forward, allowing for things to proceed swiftly forward.

While no major changes were made to the surrounding infrastructure in Lenasia, the provision of electricity was costly due to the lack of existing facilities in the area. Architect Daniel Bieldt says: ‘There were quite a lot of town planning and Johannesburg Roads Agency constraints, such as the incorporation of existing traffic flow and access to the site by pedestrians. We had to contend with a predetermined traffic flow which effectively denied us access from the main thoroughfare.’

Tagg is careful to emphasise the large market research aspect of the project. Situated in the Lenasia CBD, a stone’s throw from the train station, the 12 000m2 development has been built to service both the local community – within 3km of the site – and the large number of people who commute to work in the area.

Says Bieldt: ‘To strengthen the visual link between the centre and the CBD, we decided that an open crescent plan would be the most welcoming while simultaneously creating a separation of commercial activities from the domestic environment. We have tried to keep the building as close to a domestic scale as possible.’

The building utilises classical forms and elements such as colonnades, gables and pavilions, which, according to Bieldt, ‘lend a simple elegance to the façade’.

Developer Daya Naidoo of Silverbird Property Development, who was born in Lenasia and whose school was sited opposite the spot where his mall now stands, is happy with the result. ‘We’ve had a great response from the community. People like something new and we’re in the CBD – it’s simple and convenient.’

The development has also provided national retailers with the opportunity to make inroads into previously disadvantaged areas in a secure and well-serviced environment.

Says Tagg: ‘It’s a strip mall but you could take the actual building and quite easily place it in Sandton. Obviously your tenant mix would change but the quality and services provided here are on a par with anything in the Northern Suburbs. People’s aspirations are more the same now. Every one wants decent shopping facilities and wants to be in a nice environment. I think developers who are going in and developing cheap and cheap-looking places, often in rural areas, are going to have a very short lifespan.’

The centre’s turnover is estimated at R300-million per annum and rentals are negotiated in relation to turnover of individual stores. After three months in operation it looks as if Signet Terrace will not suffer a truncated life span with its projected turnovers for national franchises and the generation of new business for local traders. The fact that the centre is anchored by Shoprite has also helped to make it attractive to consumers in the area. Attracting local money back to Lenasia is an important part of the Signet Terrace development. Tagg also estimates that the mall has created ‘somewhere in the region of 400-500 permanent jobs’.

Furthermore, he says, the quality of service and design of the centre means upliftment of the surrounding areas: the streets will be clean, there’ll be more businesses coming through, and there’ll be new opportunities created in the vicinity. To achieve the kind of success that RNS and Silverbird are hoping for, they have placed great importance on securing the right tenant mix for the centre. Says Tagg: ‘It’s not just a matter of selecting a shoe shop. You’ve got to get a shoe shop with the right styles, the right prices and the right look for the market it’s going to serve. We go through all that detail with the tenants to make sure we’ve got merchandise that matches the consumers’ needs.’

Plans are afoot to expand the centre to meet professional and commercial demand through the development of office suites. This could bring the size of the centre up to around the 19 000m2 mark by the end of next year. Naidoo hints that phase two of the development could also include a banking mall and a motor showroom.

Says Tagg: ‘It will act as a node for future development, future enhancement and growth of the area. The benefits are going to carry on for quite some time.’

Soweto goes suburban

Protea Gardens is another Retail Network Services development being built at the bottom of Old Potch Road in Soweto.

This large 17 000m2 mall will service a primary trading population of 95 000 and a secondary market of 230 000 consumers. Protea Gardens will include an indoor section. The development is financed by Absa and the developers are Greenwold Property Developments and black empowerment partner Roux Property Development

Greenwold’s Chief Executive Officer Jean Groenewald also stresses his company’s commitment to market research. ‘We are a market-driven development company so before we go in we check sustainability, growth and capacity to ensure that the market will sustain such a development. Soweto is an area that’s in dire need of shopping facilities. I think it’s probably the biggest city in the world that has no real access to retail facilities. Hopefully, the mall’s success will see the upgrading of surrounding infrastructure by the City of Johannesburg, a clean up of the surrounding area and neighbouring sites and positive spin-offs for property prices.

‘The mall needs to make a turnover of R17m a day so that’s a lot of feet needed through its doors. I think there is a danger that some developers are going to rush into these areas without doing their research, which inevitably means some casualties.’

The centre is scheduled to be officially open on Freedom Day (27 April) and has a market potential of R700m a year.

A further RNS, Greenwold and Roux development, Jabulani Mall, is planned for Jabulani, an area targeted as part of Soweto’s tourism triangle. Says Tagg, ‘This area has always been seen as the CBD of Soweto. You’ve got your police station there, your public works, your fire station. I think bringing the shopping centre in is going to create a lot of economic development in the vicinity.’ The development will have a large cultural component to attract some of the vast numbers of tourists visiting the area and, if everything goes according to plan, is expected to open in October next year.

These new developments have also had an effect on existing malls in the area. Southgate Mall in Mondeor, one of SA’s top-10 malls in terms of size and a major shopping destination for most Sowetans, was recently refurbished and extended.Sanlam’s Dobsonville Shopping Centre, the first major shopping complex in Soweto, is about to have a facelift too. In Lenasia, Trade Routes shopping mall is due to be finished sometime next year.

While the flurry of development in many previously disadvantaged areas of Johannesburg and its environs may have spin-off benefits, there’s also the danger that the amount of available retail space will be used up soon. Most of the available space has already been snapped up by developers.

The altruistic angle of retail developments in such areas is based on a win-win situation. Local consumers get the benefit of choice and convenience; national brands increase their market share through access to areas previously unavailable to them and opportunities are created for local businesses. Tagg believes that ‘retailers and developers must be responsible and work cautiously because it’s the little guys opening the smaller shops that are going to suffer – more than the national brands – if things fall apart’.

Retailing soweto

Despite containing an estimated 43 per cent of Johannesburg’s population, Soweto only has approximately 3 per cent of the city’s retail floor space. An estimated 2.5-million square metres of formal retail space is available in metropolitan Johannesburg. Not all of this is easily accessible to Soweto residents.

Data from various sources estimates the total demand for retail goods by Soweto residents to be more than R4-billion a year, of which only R1.5m is spent within Soweto.

It is proposed that the proportion of retail spending within Soweto could reasonably increase by 50 per cent in five years time.

The strategic framework for Soweto includes a number of elements between formal and informal retail development and activity:

  • The City of Johannesburg supports the development of an additional 70 000m2 retail space in Soweto over the five years (2004-2009)
  • Approximately 30 000 m2 is under construction
  • Of the remaining 40 000m2, the City wishes to see 5 000m2 taking the form of street-front shop developments and niche stores associated with tourism and entertainment centres
  • The City wants to develop centres that accommodate local retailers, with value centres designed for smaller scale enterprises being an example.

Source: Soweto Retail Strategy, prepared for the Economic Development Unit, Department of Finance and Economic Development, City of Johannesburg, by Palmer Development Group, in association with Market Decisions, Viruly Consulting and Richard Tomlinson, November 2004.

 

Article by: Words: Tymon Smith Photography: Tristan McLaren - www.thepropertymag.com