R400 million upgrade for South Africa’s biggest shopping mall – this is what’s changing

South Africa’s biggest shopping mall—Fourways Mall—is getting a R400 million upgrade in a bid to turn it around and recover from a significant downturn over the past few years.

The mall’s biggest shareholder, Accelerate Property Fund, revealed the total cost of the latest overhaul in its delayed financial results for the year ended 31 March 2024.

The group reported a loss of R625 million for the year, driven by the revaluation of investment property to its fair values and increased expected credit loss allowances during the year resulting from long overdue debtors.

Among these revaluations, Fourways Mall lost significant value. Accelerate’s 50% share of the property declined from R4.8 billion to R3.9 billion between 2020 and 2024, taking the mall’s total value down to R7.8 billion from R9.6 billion before.

This decline is notable because it followed a big investment in Fourways Mall’s expansion and revamp in 2019.

After the expansion project, Fourways Mall’s gross lettable area (GLA) from 61,634 square meters to 88,785 square meters.

Despite the size boost, it continued to struggle with a high number of empty shops. Fourways Mall’s vacancy rate increased from 3% to 8% from 2021 to 2023.

The impact on the company’s finances was significant. Fourways Mall’s net rent per square meter has significantly deteriorated – from R298 in 2020 to R262 in 2023.

Accelerate’s latest financial results showed that Fourways Mall’s gross rent, before expenses, was R223 in 2024, much lower than its 2023 net rent of R262.

Another upgrade

The group is now betting on another major upgrade to the mall to turn things around.

The fund recently appointed Flanagan and Gerard and the Moolman Group to execute a six-month strategy to achieve this.

The groups were approached in December, officially taking over the management of the mall in February.

MD of F&G, Paul Gerard, said that the upgrade and management shift was a dynamic and multi-faceted project, which includes a “tidying up” process, phsycical developments (like in taxi and parking areas) as well as a customer experience overhaul.

He said that core to the strategy is making the mall an easy-to-access and safe place for customers, while boosting its visibility, lighting, signage, and various other elements that will make the mall appealing and stand out in a massive precinct that stretches from Design Quarter to Steyn City.

The groups are also working with the developers and owners of surrounding facilities (Fourways Crossing, Montecasino) to work on improving the entire district.

For the mall itself, though, the focus is on creating speciality nodes—like entertainment, lifestyle and shopping—and adjusting the retail mix, bringing in aspirational brands and making the mall an exciting place for shoppers to want to visit.

According to Accelerate, it is spending R400 million to upgrade Fourways Mall in a bid to improve its fundamentals, improve its cash flow and reduce vacancies. This includes the new management. It said that the impact of F&G and Moolman Group’s involvement is already being felt.

“The impact of this positive change is already visible. Investec and RMB committed to provide Accelerate’s portion of R200 million of a total R400 million of capex that will be spent on the mall,” it said.

On top of the rehabilitation attempts at Fourways, the group has been disposing of assets to settle debt – with more disposals in line for FY2025.

Read: Massive loss for owner of South Africa’s biggest shopping mall