{"id":802321,"date":"2024-12-02T10:30:00","date_gmt":"2024-12-02T08:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=802321"},"modified":"2024-12-03T10:32:00","modified_gmt":"2024-12-03T08:32:00","slug":"inside-the-spooky-south-african-shopping-mall-where-most-shops-are-empty","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/property\/802321\/inside-the-spooky-south-african-shopping-mall-where-most-shops-are-empty\/","title":{"rendered":"Inside the spooky South African shopping mall where most shops are empty"},"content":{"rendered":"\n

The Tshwane China Shopping Mall, formerly known as the Zambezi Mall, is dark and eerie. Most shops are empty, and none of the escalators or lifts work.<\/p>\n\n\n\n

The Zambezi Mall shopping centre is located in Derdepoort, Tshwane, on the corner of Sefako Makgatho Street (formerly Zambezi Road) and Moloto Road.<\/p>\n\n\n\n

The mall formed part of the Sharemax scheme in which South Africans invested around R543 million between 2008 and 2009.<\/p>\n\n\n\n

Zambezi Mall, developed by Capicol, promised to enrich and nurture the surrounding environment in the northeast of Pretoria.<\/p>\n\n\n\n

Sharemax was confident of the mall\u2019s success because of its fast-growing catchment area and its location on a high-traffic route, including a busy public transport route.<\/p>\n\n\n\n

The first phase of construction commenced in November 2005, and one year later, the second phase was under construction.<\/p>\n\n\n\n

The first two phases boasted 40 shops, with tenants including Spar, Tops, News Cafe, Build It, Ocean Basket, Video Den, Pizza Chicken Perfect, Music Mate, MTN, and Speedy.<\/p>\n\n\n\n

Building on the initial success, Zambezi Mall introduced the multi-storey third phase, which included a lettable area of 30,000 square meters.<\/p>\n\n\n\n

The retail space and shops, which range from 12 square meters to 2,600 square meters and include covered parking, were set to open in 2009.<\/p>\n\n\n\n

After a few delays, the multi-story section of the Zambezi Mall officially opened its doors in early 2010. At the time, the shopping centre was valued at over R1 billion.<\/p>\n\n\n\n

Cracks quickly started to show, with articles at the time pointing to serious financial problems and large amounts owed to Capicol.<\/p>\n\n\n\n

Vic de Klerk wrote that Sharemax bought the Zambezi Mall from Capicol for R930 million. However, investors only provided around half of that money.<\/p>\n\n\n\n

He highlighted that even if all the planned money was raised, it would amount to R539 million \u2013 only 57% of the R930 million buying price.<\/p>\n\n\n\n

Sharemax investors were promised a guaranteed interest of 10% on their Zambezi Mall investment.<\/p>\n\n\n\n

Achieving that would have required a very high occupancy rate with a net rental income far exceeding industry standards.<\/p>\n\n\n\n

The situation unravelled quickly, and within six months after opening its doors, the forensic auditor Andr\u00e9 Prakke said the Zambezi Mall was almost worthless.<\/p>\n\n\n\n

In September 2010, the South African Reserve Bank issued directives to Sharemax and its property syndication companies to repay the funds obtained from members of the public.<\/p>\n\n\n\n

This directive triggered the collapse of Sharemax\u2019s property syndication schemes, in which investors lost millions.<\/p>\n\n\n\n

Zambezi Mall becomes the Tshwane China Shopping Mall<\/strong><\/p>\n\n\n\n

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The Zambezi Mall was a dismal failure. Within months of opening its doors, shops closed down because of a lack of people visiting the centre.<\/p>\n\n\n\n

In October 2013, the Zambezi Mall was reopened as the Tshwane China Shopping Mall, with Tomas Hu as its new manager.<\/p>\n\n\n\n

Hu said that 80% of the shops had been filled. They had big plans to increase occupancy and make it a successful retail hub.<\/p>\n\n\n\n

The Nova Property Group, which tried to resolve the problems associated with Sharemax, described the situation in communication to shareholders.<\/p>\n\n\n\n

It said the Tshwane China Shopping Mall, previously known as Zambezi Mall, was tenanted by an Oriental City on a head lease basis.<\/p>\n\n\n\n

\u201cExtensive marketing of the shopping centre has been undertaken, and footfall at the shopping centre has increased drastically,\u201d it said.<\/p>\n\n\n\n

It also explained the behind-the-scenes financial battles, which included a settlement between Zambezi Retail Park Investments (Zambezi) and Capicol.<\/p>\n\n\n\n

It explained that Zambezi became entitled to the transfer of 100% of the Zambezi Mall property in 2011. However, the full amount owed to Capicol was not paid.<\/p>\n\n\n\n

A dispute over how much money Capicol owed led to \u201cdisputes and substantial litigation\u201d.<\/p>\n\n\n\n

Over the next decade, the Sharemax debacle continued, with numerous parties subject to litigation and legal battles.<\/p>\n\n\n\n

Noluntu Bam, the Ombud for Financial Advisory and Intermediary Services (FAIS), recently found that Sharemax directors were liable for an investor’s loss.<\/p>\n\n\n\n

This finding opened the door for numerous Sharemax investors who lost money to institute claims against the company\u2019s former directors.<\/p>\n\n\n\n

The Zambezi Mall today<\/strong><\/p>\n\n\n\n

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BusinessTech visited the Tshwane China Shopping Mall to see whether there have been any improvements.<\/p>\n\n\n\n

The mall\u2019s exterior is run down, and the roads around it are overgrown with grass and weeds. It is clear that the mall is not maintained.<\/p>\n\n\n\n

There is only one entrance open, and it is not very inviting. The entrance, like the mall, is run down and poorly maintained.<\/p>\n\n\n\n

Entering the mall is eerie. It is very dark, and there are nearly no people in it. None of the escalators work, and there is one shop playing loud music.<\/p>\n\n\n\n

Security guards are sitting in strange spots all around the mall, which one can assume is to keep vagrants from occupying the space.<\/p>\n\n\n\n

The shops look well-maintained, but nearly all of them are empty. It is clear that many of them used to be occupied in years gone by.<\/p>\n\n\n\n

One security guard told BusinessTech that nearly nobody was visiting the mall and that she was unaware of any plans to improve the situation.<\/p>\n\n\n\n

Unlike many other deserted shopping centres, the Tshwane China Shopping Mall is not so dilapidated that it could not be saved.<\/p>\n\n\n\n

However, it is unlikely that a developer would invest large amounts of money when it is not certain the mall would succeed.<\/p>\n\n\n\n

The litigation and shareholder mess linked to the Zambezi Mall may also scare away investors who want to try to make it successful.<\/p>\n\n\n\n

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Inside the Tshwane China Shopping Mall, formerly known as the Zambezi Mall<\/strong><\/p>\n\n\n\n