So says Mike Ruttell, development manager of Madison Property Fund Managers' property development and leasing division, who adds that this is particularly true in the case of retail centres where the fund managers were highly conscious that total refurbishments, upgrades and new tenant mixes had become necessary if returns were to continue to be sustainable.
"Since the Eskom problems have surfaced, it has become necessary to focus on refurbishment projects which often have surplus available power, and do not require lengthy town planning and council approvals, which in some cases can cause delays of over two years in bringing projects to reality."
Discussing these matters, David Rice, managing director of ApexHi, which has 415 properties worth R9,4bn in its portfolio, has said that the high current costs of building and interest rates, although apparently inimical to further development, will ensure that rental growth on existing premises will be higher than previously expected and any upgrades that can be handled during this difficult period are therefore to be welcomed.
Ruttell's team now has close to R1bn worth of work on its plate, all of it for group companies.
Some of these projects are:
1. ApexHi's new R210m The Village at the Horizon development in Roodepoort on the West Rand. By May next year this will have taken the place of the old, almost venerated Horizon View Shopping Centre on which ApexHi battled for many years to secure a feasible re-development solution, always working within the existing structural framework. Ruttell said that earlier this year it was agreed that 90% of the existing complex should be demolished to make way for a modernised solution which was able to attract high quality new tenants.
The new centre will have approximately 17,600sq m of retail and above this 2,800sq m of 'B' grade offices. Key retail anchor tenants will be Checkers (3,000sq m) and Woolworths (840sq m). The tenant mix will include a hardware store, post office, medical centre, filling station and SARS depot.
"The easy, open landscaped parking for approximately 1,200 cars, will suit shoppers in a hurry to pick up food, pharmaceuticals, videos, air time, and similar daily necessities," Ruttel says.
Silverman said that on the office section, which he described as upmarket 'B' grade, reasonable rentals of R65 per square metre to R95 per square metre (depending on the size taken) will be charged - and air-conditioning will be an optional extra.
2. ApexHi's Moreleta Plaza development in Pretoria East. This is a R31,5 million refurbishment. The contactors started work in February this year at one end of the 8,800sq m complex and they are now progressing rapidly to the other end, a programme which allows the tenants to continue trading for as long as possible. Every shop will be worked over and upgraded and the finishes throughout the interior will be much improved.
Anchor tenants at Moreleta Place will be a 3,750sq m new look Checkers and 500sq m Woolworths Foods, together with a "refreshing" new mix of tenants including home décor, interior decorating, banks, cell phone outlets, a News Café, Portuguese restaurant and a coffee shop.
3. Redefine's R193m Festival Town Square development. This is sited on the corners of CR Swart Drive and Kelvin Drive in Kempton Park, another fast growing retail node adjacent the existing Festival Mall. It is a greenfields project that will offer approximately 20,000sq m of new retail space.
The long rectangular Festival Town Square site will have a stand-alone 8,500sq m Builders Warehouse at one end and an 11,500sq m Convenience Centre at the other end. Parking facilities will include 1,200 open air landscaped bays. The anchor tenant here will be a 2,500sq m Super Spar.
For more information contact Mike Flax on 021 425 1000.
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