MENLYN PARK SHOPPING CENTRE WELCOMES TSHWANE’S MAYOR

Tshwane Executive Mayor Solly Msimanga visited Menlyn Park Shopping Centre to discuss shared interests and issues relevant to Tshwane. Olive Ndebele, the general manager at Menlyn Park Shopping Centre, was on hand to show the Mayor the refurbishment that was completed at the end of last year, which included the features that gained the centre a 4-star Green Star Retail Design rating by the Green Building Council of South Africa.

Menlyn Park Shopping Centre is a major hub for commuters who either work or shop in the mall, and centre management has worked closely with the government to ensure that public-transport facilities are in place here. This includes the Bus Rapid Transport system. Msimanga, who was elected mayor of Tshwane in August 2016, works closely with the community to address their needs around efficient public transport.

Ndebele noted that the meeting with the Mayor was a great opportunity to further cement relations between the local government and the shopping centre. “We’re always looking for ways to improve the Menlyn area for our shoppers and employees, and we’re in discussions to address parking for taxis,” she says. ”We also want to form a Central Improvement District.”

Tshwane’s new municipal offices, in the heart of the city, is home to some of the best green features found in a government building. The Mayor, who was one of the first to move into this awarding-winning building completed in June, has said that working towards an environmentally green city is close to his heart.

For its part, Menlyn Park worked incredibility hard to incorporate as many environmentally sustainable initiatives as possible during the redevelopment of the mall in 2016. Focus areas included indoor environmental quality, energy, transport, material and land-use ecology and emissions. “We were very fortunate to host mayoral delegates from the African Capital Cities Sustainability Forum last month, and they were impressed to see the strides that retail in South Africa has made towards eco-friendliness,” says Ndebele.

The Mayor’s visit will highlight cooperation during upcoming events in Tshwane following the success of this year’s African Capital Cities Sustainability Forum and the Green Home Fair, both hosted by Tshwane. Both events took place during Sustainability Week, and were crucial to further educating Africa in implementing sustainable urban development.

Menlyn Park Shopping Centre is the largest mall in Africa, with over 400 stores, including Central Park; a park in the sky, Fives Futbol and the largest gaming arcade in the country. The redevelopment, which took nearly two years to complete, provided 12 000 jobs during the construction. The expansion included 8 250 parking bays and 16 entrances and 12 exits. The centre has become an institution in Tshwane, and regularly welcomes shoppers from all over Africa.

 

Shifting consumer habits behind growth in global eating out market

The increasing presence of food and beverage (F&B) options in shopping centres – often accounting for more than 20% of units in new and redeveloped schemes in more mature markets – is being driven by rapid global growth in consumer spending on eating out, according to a new report from Cushman & Wakefield.

With spending on eating out expected to continue growing over the next 10 years, and consumers’ desire to enhance a shopping trip with social and leisure experiences, a compelling F&B offer is now critical to the success of any retail scheme, the report states.

All four global regions examined in the report are forecast to experience growth in F&B expenditure, led by Asia Pacific and the Middle East and Africa. Based on data from Oxford Economics, consumer spending is forecast to nearly double in the latter (US$182.5bn to US$363.5bn) and more than double in the former (US$1,052bn to US$2,296bn). As such, F&B spend is forecast to grow at an annual average of 7.4% up to 2026 in both regions.

As spending increases, customer expectation does too. Once-ubiquitous food courts, made up of common seating areas surrounded by fast food outlets, are a dying breed. While mainstream brands – with ability to pay higher rents – still dominate, landlords are recognising the importance of diversity and other concepts, such as the food hall, have evolved, while there is also a move towards creating different zones within shopping centres.

However, Cushman & Wakefield believes there is latent demand for more non-mainstream international food hall market place concepts, which combine restaurants with food and beverage counters and bakeries, along with the sale of cooking-related products and even cookery schools to add ‘edutainment’. Currently, only a handful of truly international players offer such a format and there is scope for more high-quality operators to emerge and enter new markets.

Nomzamo Radebe, CEO of JHI – part of Cushman & Wakefield Excellerate, notes the research reveals that: South Africa has the most developed F&B market in Africa, with international brands continuing to make inroads into the country. International Brands are providing increased competition for domestic operators. A rising population of young people in Africa and the Middle East is attracting more international food and beverage brands. Growth in sales in the F&B sector between 2017 and 2020 of 5.6% is expected in South Africa.”

Radebe adds the tie-in between shopping and eating is stronger than ever and can be seen in the significant growth of F&B outlets in shopping centres in recent years.

Radebe adds: “This is a trend that looks set to continue. We are seeing a growing number of shopping centre owners viewing F&B as a key differentiating component for the success of their retail centres, and investing in creating more exciting F&B offerings for customers. This responds to consumers’ growing interest in food culture while also adding to the experience and entertainment people today want from their visit to a shopping centre.”

 

CAPE TOWN COMMERCIAL PROPERTY INVESTMENT STRATEGY CRUCIAL FOR SEMIGRANTS

There’s no such thing as an inexpensive property investment mistake, but some markets are more equal than others and in South African commercial real estate, Cape Town is where ill-informed decisions are likely to exact the largest toll.

This according to Lance Chalwin-Milton, Joint Managing Director of specialist property auction house The High Street Auction Co. Chalwin-Milton spent years cutting his teeth in the commercial property development sector before moving into specialist property sales.

His cautionary note is specifically aimed at Cape Town’s thousands of new “semigrants” looking to launch or transplant enterprises in a commercial real estate market that is both unfamiliar and on average substantially more expensive than other parts of the country.

“Despite a depressed national economy semigration to Cape Town continues, albeit at a slightly slower rate than in 2015/16. The strong net inflow trend has in recent years driven Cape Town’s annual house price inflation to nearly double the national average.

“This influx of wealth has also ignited the regional economy, spurring commercial development and urban regeneration in many areas. Sections of the city have seen simultaneous and often considerable commercial sale and rental property price increases, while – for numerous reasons – other areas are currently regarded as unattractive investment prospects with uncertain ROI.

“Investors who are unfamiliar with the local market face a double-edged sword; depending on the nature of their businesses, they are as much at risk of a larger than necessary initial capital outlay if they opt to open their doors in high demand areas, as they are of inadvertently tying themselves to start-up millstones with commercial property purchases or long-term leases in the wrong part of town. And in Cape Town, sometimes only a couple of kilometres separate the two.”

Chalwin-Milton says hitting the commercial property “sweet spot” requires knowledge of Cape Town’s chronically congested traffic networks, consideration of where the bulk of a company’s potential workforce and specialist expertise is likely to reside and open-mindedness regarding decentralisation options.

“According to the Cape Town Central City Improvement District, some 30% of the entire city’s economically active populace is currently employed in the less than two square kilometres that comprises the CBD footprint. That’s an enormous number of residents converging on a very small area to go to work, and excludes visitors and approximately 30 000 people who are serviced daily by the various government departments within the downtown precinct.

“Even with excellent public transport infrastructure and billions being invested in new developments, the neighbouring business nodes of the CBD and the Waterfront aren’t necessarily a ‘one size fits all’ solution for new enterprises; especially those requiring larger premises. Businesses should consider the dual issues of top rates for P and A Grade spaces, as well as rapidly worsening traffic congestion that’s the inevitable result of so much development in such a small footprint.”

Chalwin-Milton notes, though, that the CBD is the hub of corporate activity in Cape Town as well as the city’s core of legal professionals, financial services sector businesses, call centres and a variety of communications companies from publishers to advertising agencies, among other industries. It is also a rapidly expanding specialist medical services precinct, and has in recent years evolved into the city’s premium gourmet destination – the latter of which underpins a rapidly expanding after-hours economy.

According to a Jones Lang LaSalle (JLL) South Africa research document on the Cape Town office market in Q1 of 2017, the average rental price of P-Grade office space in the CBD was R185m² and R235m² in the Waterfront.

“From an investment purchase perspective, rates in this bracket are an extremely attractive value proposition if a relocating company has the opportunity to buy rather than lease in these locations and the means to afford surplus space to rent out,” says Chalwin-Milton. “If that is the case, though, it’s worth taking the time to explore investment opportunities in so-called decentralised locations in the city that are less affected by traffic congestion.

“For instance, the JLL report also notes that P-Grade rental rates in Claremont in the southern suburbs can match those of the Waterfront, and if one looks to the north at Century City, P-Grade rental rates there are equivalent to the CBD.

“These areas potentially offer terrific returns for investors, but conversely can create unnecessarily high start-up costs for semigrants looking to lease office space for their new or relocated business ventures.”

Chalwin-Milton believes that the best commercial options in Cape Town at the moment lie in the northern suburbs – or even slightly further afield in the Winelands towns of Paarl and Stellenbosch. Just a short freeway ride from the city limits, they are home to thousands of skilled semigrants who have settled in the region in recent years.

“The business node around Tyger Valley has been flourishing for a long time and is consequently already a successful commercial district, but not yet on the price scale of Cape Town’s more centralised areas.

“The same is true of the Winelands towns near the city limits. These locations will almost certainly offer a decent return on investment for new buyers as well as a more cost-effective option for prospective commercial tenants. And compared to Gauteng commuting the distance is equivalent to or less than living on the East Rand and working in Sandton, or living in the Northern Suburbs and working in Jo’burg’s CBD.

“For companies not interested in the long game, slightly riskier investment areas at the moment are Bellville and the Voortrekker Road Corridor. They offer fewer fully renovated options and rentals are reasonably flat, but at the same time provide speculators with a hefty UDZ tax incentive. The City of Cape Town also considers these areas to be strategically important development nodes and more resourcing for Bellville, in particular, is on the cards as one of five defined Transit-Orientated Development (TOD) projects.”

Chalwin-Milton offers a final word of advice; business owners looking to establish themselves in Cape Town must bear in mind the restrictions created by the Peninsula’s unique geography.

“There simply isn’t endless space for the city to develop, and demand for the limited amount of land will keep prices at a premium. Figure out what’s important for your business – whether you’re in it for a quick turn-around or you plan to stay the course – and adjust your location expectations accordingly.”

MOTOR AND HOME WINTER INSURANCE CHECKLIST – MAKE SURE YOU ARE COVERED

The cold and icy weather conditions during the winter months in South Africa increases the likelihood of both motor vehicle accidents as well as property damages occurring. As a result, motorists and homeowners are urged to ensure their motor vehicles and properties are prepared to handle the change in season by conducting the appropriate safety checks and maintenance.

This is according to Dawie Loots, CEO at MUA Insurance Acceptances, who says that by conducting some basic checks, motorists and homeowners can mitigate the risk of an insurance claim during the winter period. “It is also important to ensure insurance policies are in place and that consumers are aware of the terms and conditions to avoid any claims being rejected.”

Motor checklist:

Loots explains that the risk of road accidents increases during winter because the roads are slippery either from frost due to icy weather or from water during winter rainfall, which typically takes place in the Cape region. “By conducting the below vehicle safety checks before driving in winter conditions will alleviate the risk of the driver being involved in an accident, while also reducing the possibility of any insurance claims being rejected.”

  1. Check the tyre tread is not under the legal limit – a low tyre tread makes tyres much more slippery, increasing the breaking distance and therefore the risk of accidents;
  2. Make sure the battery is in a working condition – colder weather can often cause problems with vehicle batteries;
  3. Check and replace worn wiper blades;
  4. Ensure all motor vehicle lights are working – break lights included;
  5. Conduct regular checking of coolant, water and oil levels; and
  6. Make sure brakes are tested and replaced if needed.

Home checklist:

From a home perspective, more people are lighting fires or keeping heaters on all night during winter which increases the chances of home fires taking place, says Loots.

He provides the below tips for homeowners to reduce their risk of potential fires in the home during winter:

 

  1. Avoid overloading plug points

During the cold winter weather there is often an increased use of electrical appliances, such as heaters, electric blankets, coffee machines and devices that provide entertainment as more people stay indoors. With all these electric appliances being used there is typically not enough plug points to accommodate this and as a result in many homeowners using multi-plug adaptors and overload the system. Try avoid this by consulting with an electrician on how to safely use multiple appliances.

 

  1. Use gas appliances responsibly

A lot of homeowners use gas appliances as an alternative reliable source of energy, especially during winter. Gas appliances such as stoves and heaters pose a fire hazard if they have not had the appropriate safety checks and are not used responsibly. If a fire is caused by a gas appliance that was not installed by a qualified gas installer, the related claim can be rejected.

 

  1. Never leave electrical appliances on standby mode 

Many people do not realise that the electric current is still flowing in an appliance that is placed in standby mode. This can possibly cause a fire in the event of a power surge and can also lead to the damage of the household transformers.

 

  1. Ensure chimneys and fireplaces are maintained before use

The benefits of having a fireplace comes with the responsibility of regular maintenance. This means inspecting the chimney for any loose or missing mortar and making sure the damper is filled tightly. It is advisable to have the chimney cleaned professionally every year before winter starts as leaves or birds’ nests could be stuck in the chimney and prove to be a dangerous fire hazard.

“By adhering to the above winter checklists, motorists and homeowners will not only lessen the risk of physical harm to themselves and others, but will also alleviate the financial and emotional strain of a massive insurance claim,” he concludes.