Real Estate Investor Magazine South Africa July 2013 | Page 45
COMMERCIAL
Outlying towns in the Eastern Cape such
as Sterkspruit – situated just before the
Lesotho border, and Mthatha and Tsolo in
what was formerly known as the Transkei, are
experiencing an increased demand for retail
space, reports Amanda de Lange, portfolio
manager of JHI Properties, based in Port
Elizabeth. JHI operates in the area along the
Eastern Cape from Mthatha through to East
London, King Williamstown, Sterkspruit and
Queenstown.
“Currently we are receiving a high number
of enquiries for retail space in Sterkspruit
and Mthatha, mainly as a result of a pent-up
demand as well as growing passing trade. It
also appears that national retailers, who may
perhaps have saturated the market in major
centres, are now looking at outlying areas with
potential,” says de Lange.
One example of a retailer who has acted
with foresight in this regard is Shoprite. With
over 1500 stores, it is Africa’s largest grocery
chain and is in a prime strategic position as it
has already penetrated the rural market quite
effectively. Two Shoprite stores owned by a
community property fund, in Diepsloot and
Tembisa, enjoyed the highest turnover per
square metre of any Shoprite outlet in SA over
the past two years. Futuregrowth portfolio
manager James Howard said Shoprite has a
long history of investing in township and rural
property even before returns looked promising.
“Shoprite has backed rural development for
the past 15 years, before these areas were seen
as investment hotspots. We have seen land in
places that are considered ‘no-go areas’ develop
into attractive ... stores.”
Diepsloot and Tembisa were not the only
township areas that were experiencing property
investment, he said, pointing to investors’
confidence in townships and high-density areas.
“It is specifically retail that creates the base of
a new development node that other initiatives
can then benefit from, including Bridge City in
the KwaMashu area in KwaZulu-Natal, which
was built over a commuter railway station and
has a new magistrate’s court and a hospital
being built.” And with a significant increase in
the development of townships and rural areas,
this is a new market for national retailers.
A growing rural retail lanscape
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