{"id":789102,"date":"2024-09-01T18:00:00","date_gmt":"2024-09-01T16:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=789102"},"modified":"2024-09-02T10:14:59","modified_gmt":"2024-09-02T08:14:59","slug":"saving-south-africas-largest-shopping-mall","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/property\/789102\/saving-south-africas-largest-shopping-mall\/","title":{"rendered":"Saving South Africa’s largest shopping mall"},"content":{"rendered":"\n

Fourways Mall faces serious problems, including poor foot traffic, empty stores, and financial challenges. However, it is on the path to recovery through a turnaround strategy.<\/p>\n\n\n\n

The mall is the largest shopping centre in South Africa, boasting a gross lettable area of 178,000 square meters and 350 stores.<\/p>\n\n\n\n

It is located in the heart of Johannesburg\u2019s northern suburbs, with easy access through many prominent roads.<\/p>\n\n\n\n

In 2019, Fourways Mall was expanded and revamped, offering a much better shopping experience. However, it did not work out as planned.<\/p>\n\n\n\n

Despite the very expensive expansion, Fourways Mall failed to attract the shoppers and tenants it needed to make the business work.<\/p>\n\n\n\n

It started to lose shops at a concerning rate. For example, vacancies increased from 14,349 sqm in March 2023 to 15,109 sqm six months later.<\/p>\n\n\n\n

The net rent per square meter declined from R298 in 2020 to R262 in 2023. This decline is devastating to a property owner faced with increasing costs.<\/p>\n\n\n\n

Accelerate’s 50% fair-value share of Fourways Mall declined from R4.8 billion in 2020 to R4.02 billion three years later. This is bad news for the property owners, who are losing money.<\/p>\n\n\n\n

The net rent refers to the income the company generates from the property after all property expenses are deducted.<\/p>\n\n\n\n

Accelerate\u2019s latest financial results revealed that its gross rent, before expenses, for 2024 was R223, much lower than its 2023 net rent of R262.<\/p>\n\n\n\n

The high vacancy rate and declining rent per square meter have resulted in a big decline in the property\u2019s value.<\/p>\n\n\n\n

Since the 2020 financial year, the first reporting period since the mall expansion, the mall has suffered several downward fair value adjustments.<\/p>\n\n\n\n

Asset fair values are reduced when performance suggests they are worth less than what is reported in the company\u2019s books.<\/p>\n\n\n\n

Accelerate has been forced to reduce its 50% stake in Fourways Mall by R900 million over the past four years, from a value of R4.8 billion to R3.9 billion today.<\/p>\n\n\n\n

The charts below, using Accelerate Property Fund\u2019s latest financial results, show Fourways Mall\u2019s financial challenges.<\/p>\n\n\n\n

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Big turnaround strategy<\/h2>\n\n\n\n

Fourways Mall appointed Flanagan & Gerard as the shopping centre\u2019s strategic asset manager and Moolman Group to oversee property management.<\/p>\n\n\n\n

The turnaround plan, announced earlier this year, includes improving signage for seamless navigation, introducing new tenants, and deploying backup power solutions.<\/p>\n\n\n\n

It also wants to improve security through better parking area lighting and upgraded security measures.<\/p>\n\n\n\n

To attract more shoppers, the mall will optimise traffic flow, enlarge parking bays, and revitalise the surrounding area.<\/p>\n\n\n\n

The strategy is starting to take shape. Fourways Mall has made significant strategic upgrades and introduced various new retail brands.<\/p>\n\n\n\n

Fourways Mall has significantly increased its retail offerings over the past six months, introducing 9,642 m2 of new brands and approximately 20,000 m2 of lease renewals.<\/p>\n\n\n\n

It added notable brands such as Yokico, Legends Barber, Boa Beauty, Valora Jewellery, Perfume Gallery, Crazy Store, Archive, and Mr Price Home.<\/p>\n\n\n\n

Other companies added include Nedbank, Truewood Furniture, Sheet Street, Miladys and Incredible Connection.<\/p>\n\n\n\n

Many other brands are set to open stores, including Le Creuset Factory to Table, Converse, Polo Sport, Carrol Boyes, ValueCo, Tactical HQ, Tasko\u2019s Sweets and Uniq.<\/p>\n\n\n\n

These new additions are scheduled to open through the remainder of 2024 and will be joined by Planet Fitness and more names in early 2025.<\/p>\n\n\n\n

Paul Gerard, managing director of Flanagan & Gerard said their new leases averaged 144 square meters per day over the past 29 weeks.<\/p>\n\n\n\n

\u201cIt demonstrates our commitment to ensuring Fourways Mall\u2019s position as a leading retail destination in South Africa,\u201d he said.<\/p>\n\n\n\n

In addition to the expanding retail mix, Fourways Mall is making substantial investments in infrastructure and technology.<\/p>\n\n\n\n

It installed energy-efficient lighting across all parking levels, creating brighter and safer environments for shoppers.<\/p>\n\n\n\n

The mall upgraded its northern parking deck, created clearer signage, and added a colour identity for each level.<\/p>\n\n\n\n

It launched a VIP parking area that provides customers with wider bays, enhanced lighting, and easy access to popular tenants like Woolworths.<\/p>\n\n\n\n

It also added the admyt ticketless parking system on 16 August, which uses license plate recognition and smartphone technology.<\/p>\n\n\n\n

It gives shoppers a streamlined, paperless parking experience that eliminates the need for tickets and cash.<\/p>\n\n\n\n

It further installed free Wi-Fi throughout the mall to further enhance the Fourways Mall shopping experience.<\/p>\n\n\n\n

\u201cWe hope everyone enjoys the latest changes as we work to create an exceptional shopping experience for them,\u201d said Gerard.<\/p>\n\n\n\n

\n\n\n\n

Read: The South African business legend who fought for 28 years to build one of the country\u2019s most iconic shopping malls<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Fourways Mall faces serious problems, including poor foot traffic, empty stores, and financial challenges. However, there is a strategy to turn the shopping centre around.<\/p>\n","protected":false},"author":10,"featured_media":783991,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12755],"tags":[19939,19746,1799,20460,8031,20459],"class_list":["post-789102","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property","tag-flanagan-gerard","tag-fourways-mall","tag-nedbank","tag-paul-gerard","tag-sheet-street","tag-truewood-furniture"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/789102","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=789102"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/789102\/revisions"}],"predecessor-version":[{"id":789173,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/789102\/revisions\/789173"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/783991"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=789102"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=789102"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=789102"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}