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Sep 10, 2007:
The formidable buying power in South Africa's townships is undisputed, but until recently retail space in these areas was limited, which often made shopping an arduous and costly undertaking for residents.
The logical solution – bringing malls closer to the people – bodes well for both retailers and consumers, but requires major capital investment. It also presents a sterling opportunity for black economic empowerment.
Makole Maponya from the Old Mutual IDEAS (Infrastructure, Development & Environmental Assets) Fund says the company has helped provide R130m in equity for black economic empowerment (BEE) involvement in the two projects, which will provide a total of 85,000sq m in retail space.
This demonstrates Old Mutual's commitment to investing in projects that fuel local economic development and local infrastructure development, says Maponya.
She adds that while Soweto, the country's biggest township, is seeing plenty of development, injections of equity are also facilitating growth away from the major urban centres. Two examples are Randfontein in Gauteng and Bushbuckridge in Mpumalanga.
These projects will help improve the quality of life of township residents by providing easy access to retail, as well as business and employment opportunities. And it's just the start.
"We're investigating a number of similar ventures in other townships, including Gugulethu in Cape Town. These include expanding or upgrading existing facilities, although the Randfontein development has been built from scratch.
"We provided R40m of the equity for the Randfontein project. It's situated at a train station, so it's a hub for commuters and likely to get a lot of traffic. Shoprite will be the anchor tenant."
The larger of the two projects is in Bushbuckridge, with 25,000sq m and R180m in equity, of which the IDEAS Fund provided R90m.
This is perhaps modest when compared to say, the 127,000sq m of mall space in Soweto. But, says Maponya, they're emblematic of the trend of the overdue new developments in townships, which can improve the quality of life there.
It may take some time before the imbalances of infrastructure between townships and other areas are redressed, but progress so far bodes well for achieving that, she says.
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