Akani Properties is set to invest R370 million in constructing the Autumn Leaf Mall in Zeerust in the Ramotshere Moiloa Municipality and R228 million towards upgrading the Glen Village Mall in Pretoria East.
The property development, management and investment company say that the 20 000m² shopping mall in Zeerust will open its doors in September 2022, while the full refurbishment and extension of the Glen Village Mall is expected to be complete by November 2022.
“This investment is testament to our belief that the worst is behind us, and the recovery of the economy is on the cards,” said Zamani Letjane, MD of Akani.
Letjane is confident that the improved management of any future waves of the pandemic and the rollout of the vaccine programme will improve South Africa’s prospects in the medium to long term, despite current setbacks.
He added that the market analysis on Ramotshere Moiloa Local Municipality indicates that the economy is roughly R5.4 billion and contributes roughly 2% to he total Northwest Province GDP, making it a suitable area for the construction.
Letjane said demographics for the catchment area in Protea East indicate a total of about 8 901 dwelling units, with 59% of the households falling within the middle income and 41% upper income brackets.
“Based on our research, the total annual market size of the catchment area is approximately R2.6 billion. We believe that the additions and refurbishment of the shopping centre will cater for a discerning customer in the catchment area and better position our shopping centre as a convenient strip mall.”
Letjane added that local community members in the areas can look forward to employment opportunities.
“Our developments have a high localisation content. In Zeerust, we have committed to spend a minimum of 30% of the capital budget on local labour and local qualifying contractors. All the semi-skilled labour will be sourced from the surrounding villages and townships bordering our development. Similar procurement models will be followed in the Glen Village project.”
According to the company’s statement, Akani’s ambitious outlook on the commercial property sector is partly boosted by the unexpected retail numbers which the Bureau for Economic Research (BER) said were at a six-year high as shoppers have started spending again, influenced by the low interest rates which foster consumer confidence.
Letjane said he expects interest rates to stay low although consumer inflation recently hit a 30-month high of 5.2%.
Read: Inflation hits 5.2%
In light of South Africa’s electricity problems, Letjane said to mitigate any possible disruption to the power supply, “Akani’s new developments will have renewable energy generation capacity to reduce dependency on the already constrained Eskom power generation”.
“Moreover, we are retrofitting existing buildings with solar PV for their captive power consumption,” he said.
“As long-term investors, we have taken a long-term view on South Africa’s economic recovery. We are also at an advanced stage of developing more shopping malls around the country as we seek to boost our portfolio of retail properties.”
* Palesa Mofokeng is a Moneyweb intern.