Johannesburg – The R2.5 billion invested in the expansion of the Menlyn Park Shopping Mall by majority owner Pareto is expected to result in a further R5bn being invested in shop fittings and other activities, as well as thousands of new permanent job opportunities.
Marius Muller, the chief executive Pareto Asset Management, said the rule of thumb was that six jobs were created for every 100 square metres that was built during the construction phase and another six permanent jobs per 100m² when construction was completed.
The Menlyn Park shopping centre. File picture: Supplied. Credit: INDEPENDENT MEDIA
“We are talking about creating 3 300 permanent jobs in this node,” he said on Friday at a briefing to mark less than 60 days to the official launch of the expanded centre on November 24.
Malose Kekana, the group chief executive of Pareto, said the redevelopment of Menlyn Park Shopping Centre was driven by a strong demand from retailers because they were enjoying robust trade results year on year.
Kekana said the crown jewel of the refurbished mall was Central Park, an open air piazza that would be flanked by restaurants.
Menlyn Park Shopping Centre has since last year been wholly-owned by Pareto, which is 76 percent owned by the Government Employees Pension Fund. This follows Pareto, which owned half of the super regional mall, taking transfer of the remaining 50 percent stake from Old Mutual Life Assurance.
This was in line with an asset swop transaction that resulted in Old Mutual gaining outright ownership of Cavendish Square in Cape Town, which was previously half owned by Pareto.
Pareto owns a portfolio of predominantly retail assets valued at about R28bn.
The Menlyn Park expansion and refurbishment project will add 50 000m² of retail floor space to increase the total lettable floor space to 180 000m², with the number of stores in the centre rocketing from about 300 to more than 500, as well as 8 250 parking bays.
Muller said Menlyn Park Shopping Centre would be 50 000m² bigger than the Mall of Africa at Waterfall in Midrand, and was the first mega mall on the African continent.
He said people questioned why Pareto was building such a large mall when there were so many other malls, but he stressed that the expansion was tenant driven.
Muller said they had extensive discussions to understand retail demand, retailer success and, more importantly, retailer failure.
“We offer retailers success. If the store is not large enough to carry all the brands, carry all the colours and all the sizes, you become a secondary location and then start losing sales.
“We are not big supporters of cannibalisation. We are better supporters of successful, robust, long-term investment that will stand the test of time,” he said.
Olive Ndebele, the general manager of the centre, said size did matter, but variety was more important. “We are expecting about 2 million feet a month. We are currently on an average of 1.6 million feet a month,” she said.
Muller said questions were also asked about when Pareto would invest in Menlyn when it had investments elsewhere in the country.
He said Menlyn was the fastest growing node in South Africa in terms of new businesses coming into the node and the residential area being developed around the node.
“That is the most important contributor to having a successful long-term investment, because you have a captive market because of the offices and a loyal support base through the residents… and they are from a high living standards measure group as well,” he said.