Despite the country’s instability, property developers and merchants in South Africa say they are dedicated to the fast-growing consumer market of the country’s largely Black townships.
Riots erupted in July as former President Jacob Zuma surrendered to begin a 15-month prison sentence for contempt of court.
Exp REITail (EXPJ.J) CEO Jason McCormick told Reuters that five of the company’s 27 malls were damaged, with three of them taking up to four months to reopen.
McCormick stated that the corporation was dedicated to not only renovations but also the creation of another 30 malls.
“What happened was akin to a black swan occurrence.
“I don’t think anyone ever foresaw the extent of this ever happening,” McCormick said at one of the group’s malls in Johannesburg.
McCormick’s views reflected those expressed by six other CEOs and executives of listed property companies and two retailers interviewed by Reuters.
CEO Laurence Rapp said Vukile Property Fund (VKEJ.J), for example, would repair its damaged Daveyton Mall in Johannesburg, one of the first township malls, and would forge ahead with a 90 million rand ($6.1 million) upgrade of the site.
“It’s one of our most successful malls in the portfolio in terms of all its trading densities and trading statistics,” Rapp said, adding that the current book value of the six damaged properties stood at around 2.8 to 3 billion rand.
Over the last two decades, real estate developers and merchants have focused on increasing consumer spending by the Black middle class in communities that have been disadvantaged for decades due to white minority control.
Jobs and the ease of having businesses close, which eliminates the cost of traveling to other towns, are among the benefits for such areas, and these developments attract other retailers.
Redefine Properties (RDFJ.J), South Africa’s second-largest publicly traded property company, said it was dedicated to retaining its presence but that constructing new shopping malls at this time was improbable, due to the pandemic’s economic impact rather than the upheaval.
(Reuters)
