Midrand mall race - area cannot support two megamalls

20 Apr 2012

Insurance giant Old Mutual may have lost out on the chance to build what was going to be SA's biggest shopping centre, the much-vaunted 160000m² Zonk'Izizwe Mall in Midrand.

The latter has been in the making for 10 years. The mall is a key component of a multibillion-rand mixed-use precinct planned around the Gautrain's Midrand station and Grand Central Airport.

Old Mutual is one of the biggest property owners in SA, counting Gateway in Umhlanga and Menlyn Park in Pretoria among its retail property assets.

But it seems Atterbury Property Group has pipped Old Mutual to the post in the race to build Midrand's first super-regional mall. The developer of, among others, Clearwater Mall in Roodepoort and Garden Route Mall in George plans to break ground in September on a 115000m² mall a stone's throw from Old Mutual's Zonk'Izizwe site.

Though Old Mutual applied for development rights on the 185ha site six years ago, before Atterbury's mall was mooted, final approvals for Zonk'Izizwe have been delayed by issues such as road access and environmental concerns.

Atterbury already has the necessary development rights and planning approvals in place to build its centre, likely to be named Mall of Africa.

The latter will form part of Waterfall Business Estate, a R25bn mixed-use development that spans 330ha of land on both sides of the N1 highway between the Woodmead and Allandale interchanges. Atterbury secured the rights for the Waterfall site in 2008 with long-time land owner Waterfall Islamic Institute.

Old Mutual Property deal originator Lindsay Butler confirms the group is still in a zoning process to obtain a basket of rights for Zonk'Izizwe (750000m² of retail, hospitality, entertainment and offices). He says the process is earmarked for completion by end-2012. Asked whether Old Mutual is still going ahead with the Zonk'Izizwe Mall given the Waterfall project, Butler says: "The site has the Gautrain station as a major catalyst. The development will be driven according to market demand on a phased approach."

But market commentators believe that the Midrand market can't support two megamalls. Preston Gaddy, executive head of retail at property management group Broll, says opportunities to build new shopping centres exceeding 100000m² in Gauteng are becoming few and far between. "Retailers will definitely support one of the two proposed Midrand centres but not both."

Source: Financial Mail

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