Delivering value to local communities and investors
MONEYWEB / 16 JUNE 2018 - 00.26 / JACKLINE OKEYO
Peri-urban shopping centres have the potential to develop, uplift and enable infrastructure rollout, and yield good returns for investors.
The recently opened Bambanani Shopping Centre in Diepsloot West is an example of how shopping centres on the outskirts of major metropolitan areas can contribute to enterprise development, social upliftment and infrastructure rollout while also yielding good returns for investors.
Diepsloot – a sprawling, high-density settlement of more than 800 000 people and a hub of economic activity – now has its own R250-million mall. Picture: Iguana Projects
Diepsloot was established in 1995, and is a sprawling, high-density settlement of more than 800 000 people. Plagued by a lack of infrastructure and services, it may not seem the most obvious place to build a mall, but the reality is that the area is a hub of economic activity. That’s what prompted Nthwese Developments to develop the R250-million, 18 000m2 mall. Construction began in June 2016, and the mall opened in November 2017.
Nthwese is an established black-owned company and has enterprise development as a guiding principle. Investing in local enterprise development not only helps people to earn a living and grow their businesses, it leads to long-term economic growth for the business owners, their families and their communities.
Why a shopping mall?
Despite high unemployment in the area, residents of Diepsloot needed a safe and convenient place to shop. Nthwese Developments has undertaken a number of successful projects in rural areas and peri-urban townships, and the Bambanani Shopping Centre looks set to follow suit: it was completed within budget, with no major challenges during development and construction.
The mall serves a community that previously had very limited access to a formal shopping centre.
Bambanani offers customers greater choice, access to more competitive pricing, convenience, and a safe place to shop that is also closer to home for residents of Diepsloot West. The shopping centre was especially developed to meet the retail requirements of consumers in the low- to middle-income bracket. Securing the right mix of tenants was extremely important aspect as it affects the sales, revenue, reputation and many other elements of a mall.
Bambanani’s anchor tenants include food and consumer goods retailer Shoprite, hardware retailer Cashbuild, a medical centre and a number of food, furniture and fashion stores.
The impact of enterprise development
In South Africa, consideration must be given to the development of black-owned companies to ensure they can compete. Like many rural and peri-urban developments, the Bambanani Shopping Centre will have a sustained social impact and help to transform the community – if it is approached correctly.
A key element in its development was Nthwese’s commitment to procuring services from black-owned businesses in the local community, in the interests of both enterprise development and support. In areas where there are high levels of unemployment, this is a critical element of project success and long-term sustainability. Nthwese believes it is vital to involve the local community at every stage of a development project, and sourced labourers from the township for the duration of the construction period. It also identified a number of local security, cleaning and landscaping businesses that demonstrated the potential to be upskilled as part of the mall’s facilities management team.
Nthwese’s facilities management partner FullServe, a Level 1 B-BBEE company, has subcontracted 30% of its contract to two local businesses that were selected from a number of candidates – Toyiya Empire (landscaping and cleaning) and Selwalenkwe (security).
FullServe is providing mentorship and training in terms of a 12-month enterprise development programme to help the two businesses to develop sufficient capacity to meet the requirements of the mall.
The two local business owners have also received ongoing training in areas such as recruitment, staff management, site assessment, dealing with clients, reporting and marketing, as well as compliance and adherence to industry standards. They have also received assistance with regards to registration on government’s Central Supplier Database. The company will continue to monitor and evaluate their performance to ensure the sustainability of the partnerships.
Importantly, at the end of the 12-month period, both companies will be able to demonstrate a track record. This is crucial, as many small businesses are hamstrung by their inability to develop a history of achievements. They will also have the skills and capacity to market their services to other clients.
Preferential procurement at this level will help to transform the economy. It is important for established businesses to partner with emerging business owners, and the partnerships need to foster practical day-to-day participation where innovative ideas and involvement in decision making is encouraged. This is what will pave the way for the new generation of black industrialists the country so urgently needs.
The shopping centre itself has created a number of permanent jobs for centre and store employees in an area of high unemployment.
Basic infrastructure, often lacking in under-serviced areas, is a critical requirement for property development to take place. Transport, communication, sewage, water and electricity systems are high-cost investments, and vital to any retail centre’s viability and prosperity. Not only does infrastructure have a positive effect on economic growth and development in poor peri-urban settlements like Diepsloot, it is fundamental to creating an enabling environment for vibrant and sustainable communities.
One of the greatest challenges for property developers looking to work beyond suburban boundaries is the lack of adequate supporting infrastructure. Nthwese has been committed to addressing the need for new infrastructure to meet the demands of a growing economy and population since it was founded in 1993.
As part of the township-establishment conditions approved by the City of Johannesburg, for example, the company was required to ensure that the bulk infrastructure developed to meet the requirements of a large retail mall would also give the local community improved access to infrastructure.
As a spin-off is that development of the mall has enhanced road access in a key entry and exit point of Diepsloot; the centre is easily accessible from the R511 via taxi (it has an on-site taxi rank), and on foot from the surrounding township.
It’s this type of development that President Cyril Ramaphosa spoke of when he took office and highlighted opportunities for renewal, revitalisation and progress. The assistance provided by the Department of Trade and Industry (dti) through a Critical Infrastructure Programme community infrastructure grant was critical, and is an example of what can happen as the result of a successful public-private partnership.
The programme, a cost-sharing incentive for approved developers which co-funds the building of infrastructure before development projects can go ahead, helped subsidise the spend on infrastructure for the project, which would otherwise have required extra capital expenditure on our part.
Jackline Okeyo is business development and operations director at Nthwese Developments.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER