How 10 Shopping Centres Got It Wrong

Unlisted Universal Property Professionals (Theodosiou Brothers)

Bel Air Shopping Mall, Northriding

Mall is battling & has huge vacancies Great location, visibility & accessibility but the developers do not have a good reputation in the market they have ignored every legal, economic and urban planning rule in the book according to Noseweek. Bel Air was built with no appropriate zoning rights ,on a land zoned for farm use

Source: Noseweek

.but Northgate Shopping Centre (owned by Growthpoint) located 1km away continues to trade well

Unlisted Zenprop

Design Quarter, Fourways

The developers forgot one thing an escalator!

Or was it a result of feasibility numbers not staking up? Anyway, its the first multi-level retail centre I have seen without one. right at the other end of the centre where people do not go compulsory gym session! go area

To make it worse the centre has only one set of lifts

However, the central part has stairs an unwelcome Given all this, people view the upper levels as a no The centre has good visibility from William Nicol

but lacks accessibility. To get there one has meander through circles and office blocks. Lack of signage makes it worse.

Unlisted Retail Africa

Irene Village Mall, Irene

Irene Village is an award-winning mall - the best architectural design and lifestyle concept. Unfortunately, this has not translated to increased feet. As a result some tenants like Spitz have moved out. Reason? Insufficient banking facilities & fashion for truly comparative offering. For example, Edgars is absent, a key tenant in any regional shopping centre Retail Africa has successfully developed & specialized in neighbourhood shopping centres like Chilli Lane (Sunninghill) and San Ridge (Midrand). Was Irene Village too big a development for them? Their other big development, Westwood Mall in Durban is not doing well either. Simon Susman says Westwood Mall houses their worst Woolworths store. Retail Africa are also happen to be the leasing managers of Melrose Arch Shopping Centre (included in another slide)

Unlisted - The Georgiou Group

Cedar Square, Fourways

Great visibility but terrible accessibility. You can see it from Cedar Road but how to get there is the big question.

One has to go under a bridge, winding roads and sharp

turns to get to the centre. The signage is very poor too.

This centre desperately needs good accessibility more so

given that its competing with numerous shopping centres in the node.
Pat Flanagan, one of the most successful developers, says

he cant find a reason to justify this centres existence.

Should have Georgiou (the owner) have used the cash to

refurb and extend the tired looking Fourways Mall (also the owner), located a km away, and give it critical mass?
The Fourways retail node is so fragmented that it means

the shopping experience means hopping around a number of shopping centres. Footcount is down (average for most mid to high LSM centres is flat). Do shoppers now prefer to go elsewhere?

Unlisted Zenprop

Atholl Square, Atholl

Spar, the anchor tenant is located at the basement.

People drive straight to the basement, park, shop at Spar and off they go. This leaves the ground floor shops (mostly line shops) not feeding off Spars feet.
The centre is located on the wrong side of the road

it does not benefit from homeward bound traffic.difficult to make a quick stop over to buy milk, bread or vegetables, etc.
Could learn a few tricks from Morningside Shopping

Centre

Listed Emira Property Fund

The developers attended a retail conference in the US

WorldWear Fashion Mall, Fairlands

and came up with the idea of an outdoor fashion outlet selling off-season brands at discounted prices Unfortunately, there are not many brands at WorldWear and the prices are not that different from anywhere else..and besides Cresta Shopping Centre, located less than 5km away, has a very wider offering anchor. Without one any centre will battle Highland Mews, Witbank is a good example. Pick n Pay Daily was introduced later on to avert this

Theres one major thing that they overlooked a food

Pick n Pay alone will not revive the centre. Lots of

boutiques but no other essential tenants such as a post office, pharmacy, book shop, etc. WorldWear can learn a lot from the new Morningside Shopping Centre
Vacancies continue to increase. Now at 10% and could

be heading to 15% according to management

No wonder why Emira is trying to sell it but there are

no takers yet

Unlisted

Bedford Centre, Bedfordview

Built around the concept of live, work & play Live and play concept makes sense but Im not sure about the work concept. Bedfordview is not a strong office node. Even the live concept is showing some cracks as the luxury apartments are battling to sell. However, if you shop there you could win an apartment valued at R1.8m! A conference facility, church & a hotel planned but there are no signs of these. The centre closes early on Sundays (2pm)? A reflection of poor trading? Eastgate a few kms away closes at 5pm. Having offices, retail and residential all in one place/block is asking for too much parking, security, shared services, etc. Sandton Citys expansion will have a similar concept. However, lm told the residential project could be shelved. Vacancies are increasing. The centre is likely to suffer even more when Eastgates refurbishment exercise is complete.

Big For Sale signs likes these are a reflection of desperation Bedford Centre is not necessarily new but l included it given that, two years ago, it underwent a massive R800m expansion & reconfiguration

Listed Hyprop Investments

Was built on the premise that Greenstone will be the next

Stoneridge Lifestyle Centre Greenstone

Fourways. Unfortunately, this has not happened. Was it a result of over-optimism or a slowing economy?
The centre is struggling. The office blocks across the road

are complete but are struggling to let. Residential apartments lie unoccupied with big for sale or to let signs
Was Hyprop too quick to open this value centre? Shouldnt

they have let Greenstone Shopping Centre settle down first? And does it makes sense to almost half of the tenants being furniture shops selling similar products. e.g there are about 4 bed shops. And the fragmented structure/design of the centre? No wonder why the centre is over 20% vacant
Hyprop could learn a few things from a similar concept

Woodmead Retail Park (owned by Growthpoint) which opened in the same period
Will Wolf Cesman (from Madison, Hyprops asset mangers),

the man largely credited for converting a mere farmland, to the great Sandton City Shopping Centre (at a time when the Joburg CBD was the place to be), come up with a solution to fix the mistakes? Or is Stoneridge just waiting for the economy to recover? It actually needs both

Unlisted Amdec & Property Partners

Suffers from identity crisis:

Melrose Arch Shopping Centre Melrose

Melrose Arch has long been seen as a premium node targeting the very high LSM.from the record office rentals to the high end apartments & Ferraris. Given this, Melrose is seen as a no-go area by the mid to low LSM market (unlike Sandton City). Mismatch - screened office tenants by charging R150200/m but never screened retail tenants. So they have moved away from the niche market? It will take time for the market to digest that.

Maybe Phase II, with a proposed 6,000m Edgars, cinemas, etc, will

give it critical mass. But the major retail nodes, Rosebank Malls and Sandton City, are busy with upgrades and extensions and both boast of the Gautrain station. This does not bode well for Melrose Arch.
The retail centre is easily accessible but lacks visibility and the

location is questionable. Which market are they targeting? Melrose and Athol? How many people stay there? I heard 500 or so but most of them are always out of the country anyway.
The office blocks above the shopping centre are struggling to let.

The retail-office combo has never been successful. Examples include Musgrave Centre in Durban Sandton City & Randburg Square.
Clear message helps Morningside & Hyde Park Shopping Centres

are high LSM boutique shopping centre they do not pretend nor do they try to be something else. Resilient Property Income Fund is allergic to boutiques their target market is national tenants. However, both models work. Morningside is a third the size of Melrose Shopping Centre but its footcount is easily 3 times more! The other negative - the shopping centre is like a wind tunnel they covered the roof but forgot to cover the entrance

Unlisted Maponya/Zenprop/Investec
Richard Maponya had a dream - to bring Sandton City to

Maponya Mall, Soweto

Soweto. He partnered with the supposedly experienced property companies - Zenprop and Investec. Unfortunately, it was their first exposure to the township market.
The big mistake that they made was to transplant

Sandton City to Soweto. Yes, its an aspirational market but one needs a closer understanding on issues like culture & demographics. There is a big Mugg & Bean which l have never seen it more than 20% full. Going out for breakfast, tea or coffee is not a township culture. Why should one pay far much more for breakfast yet a home-made one is far much cheaper? Exclusive Books is not doing well either. They brought a lot of expensive boutiques e.g. Fabiani selling shirts for R2,000.
Boutiques are battling and vacancies are creeping up.

Was 75,000m too big for Maponya Mall? For instance, a competitor, Jabulani Mall (Resilient Property Income Fund) opted for 45,000m
Jabulani is a good example of a centre in touch with the

lower LSM market all about the basics a model that has led to Resilients success, wherever they go.