The R3.5 billion ‘ghost’ shopping mall in Pretoria which is completely empty
The R3.5 billion Villa shopping centre southeast of Pretoria has been in a derelict state for fifteen years without any signs of improvement.
The Villa shopping centre on the corner of Delmas and De Villebois roads in Moreleta Park was one of Sharemax’s ambitious projects.
Sharemax Investments was started in 1999 by Willie Botha and showed strong growth to become one of South Africa’s largest unlisted property investment companies.
Botha, who served as Sharemax’s managing director, explained that they made it possible for retail investors to get exposure to prime commercial property.
He said their investment scheme “takes a wholesale building and turns it into a retail product, in which individuals can invest by means of shareholding.”
Sharemax acted as the promoter where “well-located, prime suburban shopping centres are registered and managed as a single company”.
Therefore, the individual investors obtained a shareholding in a shopping centre that has a building as an underlying asset without a bond on the property.
It sounded great on paper. However, in 2010, the South African Reserve Bank found that Sharemax’s funding models contravened the Bank’s Act.
In September 2010, the Registrar’s Office issued directives to Sharemax and its property syndication companies to repay the funds obtained from members of the public.
This directive triggered the collapse of Sharemax’s property syndication schemes, in which investors lost millions.
Many people argued that the South African Reserve Bank caused Sharemax’s collapse rather than shady business practices.
However, others, like Noluntu Bam, the former ombud for financial advisory and intermediary services (Fais), argued that some Sharemax projects functioned like a Ponzi scheme.
The Hawks also investigated allegations that Sharemax committed fraud and whether it operated a pyramid or Ponzi scheme.
However, Sharemax attorney Eckaard Le Roux denied allegations that Sharemax’s property syndication schemes were Ponzis.
The Companies and Intellectual Property Commission (CIPC) investigated the matter and is set to release a report on property syndication schemes.
Villa shopping centre
The Villa shopping centre in Moreleta Park was one of Sharemax’s most ambitious property syndication projects.
The shopping centre on the corner of Delmas and De Villebois roads attracted thousands of investors who pumped R1.5 billion into the scheme.
The Villa shopping centre was set to become one of the largest shopping centres in South Africa, competing against the popular Menlyn Park.
Construction started in January 2009 and was anticipated to reach practical completion at the end of August 2011.
The Villa Mall was set to provide retail space for over 300 tenants with 90,000 square meters of retail space.
The precinct would also feature 16,000 square meters of office space and around 5,000 square meters of lifestyle space.
The shopping centre was also set to be one of the most advanced in environmental initiatives and being green.
Rainwater would be harvested from a third of the total roof area and reused for irrigation and toilet flushing, and the landscape was set to be designed with waterwise plantings.
A combination of green roofs, photovoltaics, and a roofing material with a high solar reflectance index would have minimised the urban heat island effect.
30% of the cement used in the project was replaced by industrial waste products, reducing the concrete’s embodied energy.
There was also a 20% reduction in structural concrete by having a lightweight facade and internal partitioning structures.
However, just as the mall was 75% complete and starting to take shape, the Sharemax collapse in 2010 stopped construction.
Sharemax’s Botha tried to rescue the project and ensure investors did not lose their money. However, this was not successful.
In 2011, Capicol CEO Paul Kyriacou said that the development of The Villa shopping centre would cost between R700 million and R800 million.
However, over the last fourteen years, the Sharemax matter has been tied up in litigation and there has been no further development at the mall.
The community has regularly raised their frustrations about the structure, which is an eyesore in the area.
However, the city could not do much as there are many ongoing legal battles surrounding the Sharemax scheme.
This means that the Villa Mall remains completely empty, without any clarity on whether or when it will be completed.
What was planned with the Villa Mall
What the Villa Mall looks like today
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