R 130m expansion for Nelspruit shopping mall

NELSPRUIT’s Riverside Mall shopping centre is to be redeveloped by Old Mutual in a R 130-million expansion that will add a host of top retailers to the existing tenant mix.

“It is hoped to start construction within the next month to ensure completion of the redevelopment by October 2005,” said Brent Wiltshire, retail property executive of Old Mutual Properties.

The redevelopment will be undertaken by Old Mutual Properties.

“We expect the redevelopment to provide a substantial boost to the local economy. Jobs will be created in the short term in the construction phase among contractors and subcontractors and in the building supply industry and in the longer term by the retailers who will be opening stores in the expanded centre.”

Wiltshire said that the total rentable area of the Riverside Mall, which celebrates its 6th birthday this month, will increase from 36 287m2 to 49 529m2.

“This will see the addition of a 3 642m2 Checkers and 3 559m2 Edgars serving as anchor tenants in a ground-floor extension along with a Truworths emporium, Mr Price Weekend, @Home, Young Designers Emporium, and several line shops. Truworths and Mr Price will substantially expand their trading areas.

“The Pick ‘n Pay store, which has twice won the award of best-performing supermarket within the Old Mutual Properties portfolio, will be expanded by 1 282m2. Several of the smaller national retailers also require expansion.”

There will also be a new entrance to Woolworths and the parking will be extended to provide a total of 2 823 bays.

Wiltshire said the redevelopment would entrench Riverside Mall as the premier shopping centre in Mpumalanga, with the newcomers to the centre adding to the already strong tenant mix.

“The building programme will be tackled in such a way as to ensure that it is business as usual for our existing retailers and their customers visiting Riverside Mall. Our aim is to ensure a minimum of inconvenience during the construction phase.”


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SA malls up for international acclaim

Before you complain that the mall is too crowded next Saturday morning, it might be interesting to note that some of the reasons for their popularity are putting them on the international map. Or two of them at least: Gateway Theatre of Shopping at Umhlanga and Menlyn Park in Pretoria, are in the running for Maxi awards, the premier marketing honour of the International Council of Shopping Centres.

The council, the global association for the retail real estate industry has nominated four projects – two from each of the centres – as finalists for the 2004 Maxi awards, the “Oscars” of shopping centre marketing. The awards will be announced in September.

“This is the third year in succession that projects at the two centres have been chosen as finalists,” says Brent Wiltshire, retail property executive of Old Mutual Properties, which manages Gateway and Menlyn Park. “No other centre in South Africa has ever made the finals.”

The Gateway projects were the staging of shows featuring Barney, the popular children’s character, and hosting Africa’s longest breakfast table which raised R90 000 for the Reach for a Dream Foundation. At Menlyn Park, the projects gaining attention were the 10th annual Vukani fashion awards, and of Boktown, which brought the environment of a Springbok rugby test to shoppers.



Thousands gain new skills through multi-faceted service programme

THOUSANDS of men and women engaged in the portfolios of retail, commercial and industrial premises developed and managed by Old Mutual Properties, are gaining new skills through Imprint, a multi-faceted programme aimed at empowering them to deliver world-class service.

The SETA-registered was prompted by Old Mutual Properties’ drive to ensure that contact with staff and those service providers who manage company properties is synonymous with service excellence.

Brent Wiltshire, retail executive for Old Mutual Properties, says: “Imprint has its origin in our retail division where we go to great lengths to design and build shopping destinations for our clients that provide a unique and enjoyable experience. To ensure a place in which people feel comfortable to relax, interact and have fun requires a dedicated focus on the human component. This is where customer service comes in.

“It is our intention not only to enhance the service provided at our centres but that the people involved benefit from the training they receive in their jobs.

“We currently employ thousands of workers via our service providers and this programme means that each person has their personal approach enhanced. The programme addresses personal enhancement through a focus on life skills, nutritional intake and management of finances, including a look at products and services best suited to individual needs.

“Complementing this programme is an initiative which has seen smaller tenants in shopping centres receive consulting service on retailing. This service was first introduced as a landlord initiative to support small traders needing assistance through difficult periods, particularly in the early stages of a shopping centre’s life.

“The trust is on helping retailers improve their offerings according to the basics of retailing. Programmes for small retailers and individual store assessments will address any overall deficiencies in what our tenants have to offer.”


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Big office move on Foreshore

THE eastern precinct of Cape Town’s Foreshore is set to register one of the larger office relocations in the area in recent years.

After 20 years in Broadway Centre on Hertzog Boulevard, BDO Spencer Steward is moving its growing accounting and business services practice into 2 400m2 at the former ICL House on the corner of Oswald Pirow Street from December 1.

The property was proposed by Viv Delbridge, of Corporate Real Estate Services (CRES) division of Old Mutual Properties. BDO managing partner Ian Scott says the building is being remodelled to to their specifications following its purchase by a consortium in a transaction jointly brokered by Delbridge and Dudley Annenberg of Annenberg Real Estate.

“We have grown from merely being an accounting practice into advisers to expanding and owner-managed businesses and needed more modern open-plan offices,” explained Scott.

“CRES highlighted the former ICL House to us as a potential solution, but we elected to pursue other alternatives. None of these were realised. We were then again approached by Viv Delbridge of CRES and Dudley Annenberg and opted for the move, given that parking would be built in and space remodelled to our requirements. The Foreshore offers good value and is close to public transport.”

Two floors of the seven-storey building are being revamped to house 50 parking bays. BDO Spencer Steward will occupy the top three floors and two others are being let.


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Gateway shoppers hit the 25 million mark

SINCE opening its doors in September 2001, Gateway Theatre of Shopping’s foot traffic has reached the 25 million mark.

Overall, the December 2002 shopper flow of 2.26 million was 1.1% less than December 2001, but with an increase of 10.4% in vehicle traffic. This increase in vehicle traffic was attributed to an increase in dedicated shopping trips.

Growth over December in 2001 was 15%, with several national retailers in the 25% to 40% bracket. Market research, undertaken in the two successive Decembers, reveals increasing loyalty to Gateway by Durban customers, and growth in the tourist market.

Research undertaken by Urban Studies revealed an increase in loyalty of 15%, with potential for this to further increase in 2003. The research feedback indicated a significant upwards shift in Gateway’s customer profile, together with a major increase in the tourist component.

Major points include a change in average customer income increasing from R16 000 to R23 500 spend per family increasing from R562 to R845. Tourists visiting Durban made up 31% of the customers, double the figure for 2001 of 15%, while international tourists increased from 1% to 3%.

As a result of positive market feedback, there is renewed interest in space, with 9% of the centre remaining vacant. Negotiations with two national chains are close to conclusion. Together, their ten stores will occupy in excess of 9 000m2, requiring an extension to the centre.

With several stores needing to be combined to facilitate this development, 60 vacant stores will still need to be let. it is anticipated the bulk of this space will year.

Brent Wiltshire, Old Mutual Properties national retail executive, said with its attraction of an average of 1.46 million visitors a month, Gateway takes the successful formula of mixing leisure, shopping and entertainment to a new level. Some 40% of its entire area is devoted to entertainment.

Research has indicated that night trading is taking increased prominence. This is in line with an international trend for 30% of moviegoers to make other purchases in the centres they visit.



Old Mutual Properties boosts offshore arm

OLD Mutual Properties is strengthening its offshore property management arm and has added a contract to provide leasing, marketing, facilities management and operational support services for Ukraine’s premier shopping centre, Univermag Ukraina.

The appointment to manage the centre, which is undergoing a $20mil renovation, will see Old Mutual Properties consulting for New York based NCH Capital, which owns 93% of the Kiev complex.

NCH is an investment group targeting the emerging markets of the former Soviet Union and Eastern Europe, and is one of the largest investors in the region’s privatisation programes. It has direct investments in more than 100 companies in Russia, Latvia, Bulgaria, Estonia, Kazakhstan, Ukraine, Lithuania, Romania, Georgia and Moldova.

Old Mutual Properties retail property executive Brent Wiltshire says the appointment is a major breakthrough into a key emerging market. It follows Old Mutual Properties’ consulting assignments in the Middle East.

The NCH work entails developing an appropriate tenant mix plan and rolling out a leasing strategy that will attract international and local retailers to the 25 000m2 centre.

“We will also provide marketing support, focusing on prospective tenants and consumers, and training centre management,” says Wiltshire. “We will issue tender specifications and service level agreements for centre services, evaluate tenders to ensure the centre is managed cost-effectively to best standards, and award contracts to be carried out in accordance with service level agreements,” he says.

The complex, originally a state department store which opened in 1966, is in Victory Square, one of the best retail sites in Kiev. It is also near the main train stationed an easy walk from bus, tram and metro systems.

It is estimated that more than 200 000 commuters walk past the complex every day, says Wiltshire. The upgrading of the four-storey complex will include modernising its trading areas, installing state-of-the-art escalators with convenient access to all parts of the building, improving lighting and implementing substantial cosmetic repairs.



Ukraine contract for Old Mutual Properties

Old Mutual Properties has won a contract to provide leasing, marketing, facilities management and operational support services for Ukraine’s best-known retail complex, Univermag Ukraina, which is now undergoing a $20 million renovation.

The appointment will see the company consulting to New York-based NCH Capital Inc which owns 93% of the complex in the heart of Kiev, the capital.

The city has a population of 4 million.

NCH, an investment group targeting the emerging markets of the former Soviet Union and Eastern Europe, is one of the largest investors in the privatisation programmes of the region. It has direct investments in more than 100 companies in Russia, Latvia, Bulgaria, Estonia Kazakhstan, Ukraine, Lithuania, Romania, Georgia and Moldova.

Brent Wiltshire, retail property executive of Old Mutual Properties, says the appointment is a major breakthrough into key emerging markets. It follows earlier consulting agreements by Old Mutual Properties in the Middle East.

“For NCH and Univermag Ukraina, we are developing an appropriate tenant mix plan and then rolling out a leasing strategy that best meets the needs to attract both international and local retailers to the 25 000m2 centre,” he says. “We will also provide marketing support, focussing both on prospective tenants and consumers, and training of centre management.”

“In the area of facilities management, we will issue tender specifications and service level agreements for centre services, evaluate tenders to ensure the centre is managed cost-efficiently to best standards, and award contracts to be carried out in accordance with service level agreements.”

Wiltshire says Old Mutual Properties will oversee the management of the complex for two years.

“One of the first opportunities to market Univermag Ukrania was at Mapic, the international retail exposition in Cannes in November. We have been showcasing our recent developments in Southern Africa and our range of property services for several years at Mapic and added Univermag Ukraina to our offering this year.”

He says the complex, first opened as a state department store in 1966, is in Victory Square, one of the best retail locations in Kiev.

“It is near the main train station and within an easy walk of the local bus, tram and metro system. It is estimated more than 200 000 commuters walk past the complex every day.”



Insurer takes five floors in landmark CBD office block

MUTUAL and Federal Insurance has signed a 10-year lease for 5 557m2 over five floors in Safmarine House, boasting occupancy of the CBD landmark building to 98%.

The lease, effective from last Thursday, follows the acquisition by Mutual and Federal of CGU Insurance, which led to increased space requirements. One of the city’s largest leasing deals in recent years, it involved relocating the eight existing tenants within the office tower.

Viv Delbridge, of Old Mutual Properties’ Corporate Real Estate Services, who handled the deal, says the lease is a further signal of the Cape Town CBD’s vibrancy.

She says Mutual and Federal wanted a presence on contiguous floors in the A-grade flagship in the CBD only if the right deal was struck.

“There was some space available in the building after an office downsizing by the building’s former major tenant, SA Marine Corporation (Safmarine), in the wake of its takeover by Danish shipping line OP Möller. That came after we negotiated consolidation of operations and the renegotiations of some leases, which facilitated the conclusion of the multi-million-dollar sale to OP Möller.”

Marten van Leeuwen, branch manager of Mutual and Federal Cape Town, said Safmarine House was an appropriate location because it was near a public transport system, it gave the company a presence in a building that matched its own blue-chip image in the CBD, which was clearly benefiting from initiatives of the City Improvement District, and it was convenient for clients.

Nigel Ressell, who handles national property requirements for Mutual and Federal, added that though there were reasonable alternatives on the market, Mutual and Federal was happy that Old Mutual Properties was able to go to such lengths to create a property solution and the kind of space the insurer required.

“Brenda Bibby, property manager of Safmarine House for Old Mutual Properties, began to negotiate with eight existing tenants in April last year”, says Delbridge. Delbridge is now assisting M&F with space requirements in Old Mutual Centre in Durban, another building managed by Old Mutual Properties, and will be developing solutions for M&F in the Johannesburg and Pretoria CBD.



Mega-malls’ days are numbered

AMPLE development at the top end of the retail market, resulting in a well-serviced middle and upper class, is causing retailers and developers to set their sights lower.

Future development of massive shopping centres such as Sandton City and Canal Walk will be limited, but retailers like Edcon and Woolworths will tap into the lower end – through Super Mart and iSentials respectively – as some developers move into the townships.

And while there may not be room for major shopping centres, the development of regional and speciality centres continue apace.

Research by the South African Property Owners Association says “super regionals” or centres of more than 65 000 m2 were the weakest in the sector. It says this could be due to the demand for convenience, regional densification and traffic congestion.

Redefine chairman and retail property doyen Wolf Cesman says it would be difficult, but not impossible, to develop more big shopping centres, but they would be worthwhile only in select centres. South Africa does not have a surplus of major tenants, so a big centre would merely be a replica of nearby small and regional centres.

Cesman says that the new centres are still performing, and although new centres such as Canal Walk and Gateway were initially considered unsuccessful, they are now doing well as they were well located and have good tenants.

He agrees that township developments “have always been a challenge”. Residents from Soweto, for example, are shopping in the Johannesburg CBD or malls in the southern-suburbs.

Recent research from Europe shows that a visit to a centre is about more than shopping. Some people go just for coffee. “The essence remains that it should be a place where people can go and get everything under one roof, where they can compare a number of shops selling the same things, and where they have choice.”

Shopping centres supplement this offering with entertainment centres. Old Mutual Properties has a special division to find non-conventional revenue streams in its shopping centres. For example, more than 40% of Umhlanga’s Gateway shopping centre’s space is devoted to entertainment.

But retail property sources say the bulk of new development is at the lower end. This includes the mushrooming of value marts, often adjacent to big shopping centres, where retailers pay lower rentals and sell in bulk.

Old Mutual Properties retail executive Brent Wiltshire says more competition may well develop in the lower end of the market, given that there are millions of low-income South Africans.

“There are large emerging markets with a lot of buying power coming to the fore and these shoppers, who are strongly aspirational, need to be catered for.”

And there are significant opportunities to bring centres into the townships. Shoprite is the anchor tenant of a new development, the Bara mall, on the outskirts of Soweto. Bara mall, which is being developed by 60% black-owned Landmark, will have as its tenants 70% national retailers, including the major banks, and 30% local retailers.

Landmark development director Dennis Thobejane says the company has just closed on tenders and will start building early next month. The centre is already fully let with a significant waiting list.


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New premises for research company

RESEARCH Surveys, one of South Africa’s leading market research in the listed Adcorp Group, is set to relocate its Cape Town head office after saving thousands of rand and hundreds of man-hours in a carefully planned selection process. Research Surveys will take 3 500m2 in Compustat House, a double-storey office block in Newlands.

“Research Surveys has grown rapidly over the past 20 years,” says CEO Henry Barenblatt. “The question was, what do you do when your company eventually spreads its offices over several different buildings, ranging from grand Victorian buildings to more modern cottages.? We felt we were losing potential synergies because of the dispersed nature of our staff and the lack of meeting around the mythical office water-cooler.”

Faced with a mix-and-match collection of premises in Kloof Street, Gardens and Claremont, and inundated by proposals from almost every property broker in the market to consolidate their premises, Research Surveys was faced with a dilemma – how to separate the apples from the lemons in a marketplace they didn’t deal with every day.

The company mandated the Corporate Real Estate Services (CRES) division of Old Mutual Properties to find new premises.

Viv Delbridge of CRES says the team first surveyed the needs of management and staff at Research Surveys, before embarking on and exhaustive analysis of more than 100 properties and developments that might suit the burgeoning needs of the company. A tight short-list of buildings was presented, and decision makers at Research Surveys then had only a small number of properties to view and review.

Although it’s an Old Mutual initiative, CRES does not bind itself to buildings managed by Old Mutual Properties.

“We seek the best solutions for the tenant, ” Delbridge says, “and if that solution happens to be in a building owned by another company, then so be it. CRES does what’s best for its client, the occupier. And the best building in this case required significant effort to nail down. We had to negotiate for an existing tenant to make way for Research Surveys and for significant remodelling to appropriately reflect their corporate image and provide the type of space that would best suit a team-based means of operating.”

Barenblatt agrees that the space a business occupies has an important impact on productivity.

“Having all of our departments under one roof will improve communication, cross-functional productivity and shared learning immensely. That’s worth an enormous amount in an idea-intensive industry like the research field.”

Wall and Smith Property Consultants were able, with the brief from Viv Delbridge, to find a building that satisfied the client needs. Keeping knowledge workers happy can be trying, but the premises Research Surveys are moving into has staff amenities like banks, doctors, convenience retail and public transport all within easy walking distance.