Fourways Mall’s R9bn overhaul is finally complete, with the shopping centre re-opening on Thursday as Africa’s largest — the equivalent of more than 20 rugby fields.
Its owners, listed property fund Accelerate Property Fund and developer Azrapart, have spent five years redeveloping the mall, which is the centre of Fourways, with a view to it delivering market-beating returns in the long term.
“The launch represents the first step in the fund’s 15-year plan for the Fourways node, including enhanced office, hospitality and retail offerings,” said Andrew Costa, COO of Accelerate.
“The impact of new traffic routes, densification and growth, as well as developing and maximising properties that enhance the value of the area is key to future growth in the node,” he said.
The shopping and entertainment complex boasts a gross lettable area of 178,000m2, including more than 450 stores. This will later increase to 200,000m2 with the launch of French home improvement retailer Leroy Merlin, which has a store linked to the main mall currently under construction.
Costa said Fourways Mall’s prime location meant it could excel in a country that critics have said is overshopped. SA has the sixth most shopping centres in the world, according to the SA Council of Shopping Centres. With a population of about 58-million people, it has roughly twice as many as Spain, which has a population of about 47-million.
Evan Robins, a portfolio manager at Old Mutual Investment Group, said the middle class in SA was not large enough to support the construction of any more super-regional shopping centres after Fourways.
“We believe this shopping centre is the best placed to trade admirably now and to benefit from a recovery in the economy when it eventually comes,” Costa said.
Half of the mall is owned by Accelerate, the other 50% by Azrapart. Michael Georgiou, Accelerate’s CEO, is the largest shareholder in Azrapart.
The mall is this continent’s largest, ahead of Pretoria’s Menlyn Park, Umhlanga’s Gateway Theatre of Shopping, Midrand’s Mall of Africa and Sandton City.
The redevelopment was hit by delays because some subcontractors had closed shop as a result of the weak economy, and Costa said it was “a monumental task” adding 300 stores and redesigning big sections of the mall. It was originally supposed to open in September 2018 and then in April 2019.
Fourways Mall is Accelerate’s flagship asset, which has bolstered the fund’s net asset value (NAV), which has grown from R3.3bn in 2013 at listing to R8bn.
Accelerate's portfolio has grown from 51 properties at listing to 62 today. Accelerate has earmarked about R1bn worth of noncore properties for sale and set a target loan-to-value (LTV) ratio of 35%. The LTV is slightly over 40% at present. The proceeds from the sale of these properties will be used to either reduce debt or buy back Accelerate shares.
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