July 3 2024 20:00
Redefine Properties, a JSE-listed real estate investment trust (Reit) with a diversified property portfolio worth about R100.4bn, is investing R45m in Mall of the South as it looks to generate more returns from the recently acquired retail asset.
Redefine has increased its exposure to retail as office landlords find it more difficult to attract tenants with working habits and strategies having changed. The mall is in the heart of southern Johannesburg in the asuburb of Aspen Hills. It is a 68 168 square metre shopping centre which offers optimal exposure and convenient access from two main arterial roads, Kliprivier Drive and Swartkoppies Road, which border the mall.
“Mall of the South, with a varied retail offering of 160 stores as it stands, is a key asset that is situated in a node where it is the dominant retail offering,” said Nashil Chotoki, National Asset Manager at Redefine.
“It’s an asset that is accretive for our portfolio, from an investment return perspective,” he said.
Redefine is investing R38m in capital expenditure to develop available bulk land for two fast-food drive-throughs that will supplement the mall’s existing fast-food offering, as well as a tyre fitment centre, according to Chotoki.
Redefine has engaged taxi associations and local authorities, such as the Gauteng Department of Transport and the Johannesburg Roads Agency, to construct a taxi rank on the mall’s premises. These are intended to make it easier to access and leave the mall.
Commuting customers are dropped off on Swartkoppies Road and walk to access the mall. The new plan allows for customers to be dropped off inside the mall’s perimeter after the taxi rank is moved, improving access and providing a more convenient option for commuter shoppers.
Chotoki said the expected completion of the taxi rank relocation is dependent on the Gauteng Department of Transport’s approval.
Redefine has taken advantage of the opportunity provided by Game leaving the mall with the addition of Shoprite which officially opened in May 2024.
According to Chotoki, this reconfiguration will draw in a different kind of customer that is looking for value and essential offerings, increasing foot traffic in the mall.
“The relocation of the taxi rank contributes to the success of enabling the value offering,” he said.
Redefine is also working with existing retailer Incredible Connection, a retailer backed by Pepkor, to enlarge the store space to cater to the electronics gap left by Game’s vacancy.
“We are continuously lowering our exposure to and right-sizing underperforming tenants as part of ongoing leasing strategies. We’re also introducing new retailers that are entering the market to Mall of the South’s tenant mix,” said Chotoki.
The remaining R7m of capital will be used to consolidate the fast-food offering into a single food court, as well as to expand the restaurant area onto an outdoor deck that aims to improve the overall ambience and dining experience. As it stands, food outlets are scattered across the premises, according to Redefine.
Redefine is working to switch the entire mall to backup power integrated into its solar PV plant to lessen reliance on municipal services and guarantee consistent operation of the asset. This integration will lower operating expenses and diesel consumption while also limiting business disruption.
Mall of the South has one of the largest solar PV plants in the Redefine portfolio at 5.2MwP, which provides approximately 25% of annual energy requirements.
Around 34% of the mall’s shoppers sit in a high-income category and, therefore, contribute to a higher basket of spend, comparatively. Following the value-focused adjustments and addition of a value-focused offering, Redefine hopes to make the mall’s offering more diverse and inclusive to all income levels.
Mall of the South is valued at R1.8bn, which is in line with its purchase value. According to Chotoki, the planned additional capital expenditure will increase the asset’s value more.
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