Fourways Mall needs fix
LEAK LIKE SIEVE: DURING THUNDERSTORMS, BUCKETS LINE UP ON EVERY CORRIDOR
Over a quarter of shops are empty. Accelerate needs to turn this around.
At this point, more than 120 of the roughly 450 stores at Fourways Mall are vacant – that’s more than a quarter of outlets. Anyone visiting the centre can see just how much retail space is unoccupied. Entire wings of the centre have simply been unlet since the “new” mall opened in August 2019.
In one of these, a particular store has been ostensibly “opening soon” for over three years. There are 14 vacant shops in this wing built as part of the major multi-billion-rand redevelopment of the mall towards the end of the last decade.
In the remainder of the new space, there are more than 50 empty shops. Nearly half this total are empty stores in the upstairs link between Woolworths and Toys R Us. JB Active shut towards the end of last year, all its remaining stock inside. There are fewer than a handful of trading outlets in this entire stretch of mall.
In the “old” mall, there are a total of 28 vacant stores, excluding the food court area. In that, there’s around half a dozen. And in the “mall link” to the Food Lovers Market on Cedar Road, which includes all the banks, there are 22 vacancies.
(During load shedding, there is little to no common area lighting in this corridor, which makes it look even more depressing than it already does.)
Some retail spaces are clearly vacant, some stores are recently shut with their stock and fittings still inside. Others have still never been tenanted.
Retail landlords get nervous when vacancies at their malls near 5%. Accelerate Property Fund, 50% owners of the struggling Fourways Mall, are correct to be worried.
Officially, vacancies were 15 000m2 at the end of last year, but the numbers disclosed by the fund in recent years have excluded any vacancies under a head lease signed between it and the developers. At the 15 000m2 level, vacancies are around 8.5% of gross lettable area (GLA).
The head lease complicates matters. What we do know is that this lease covers all vacant premises as at 1 September, 2019, which totalled 22 000m2 (or 12.7% of GLA). A year later, this had reduced to 17 000m2 and by September 2022, this was around 13 500m2.
Based on the available evidence – walking the mall – it is quite conceivable that this is now higher in the new year.
The “official” 15 000m2 number is also likely to be more now, as a number of stores appear to have failed post-Christmas, plus any pop-up stores are also gone.
Together, total vacancies are almost certainly above 15% of GLA, and perhaps as high as 20%.
This only tells half the story, though. The overwhelming majority of the vacant stores are “line shops” – smaller spaces which command a far, far higher rental per square metre than a large clothing store or supermarket. The rental being forgone by the mall on these stores is material.
The centre, as humungous as it is and touted at relaunch as the biggest mall in South Africa, also has very few restaurants.
Restaurants also command considerably higher rentals (per square metre) than the large retailers will be paying.
The problem extends much deeper than just the tenant mix (although this is at the core of the issues).
Sections of the “old” mall remain unfinished, especially the area immediately surrounding the Boeing 737 shell which was meant to be the core feature of the as-yet still unopened KidZania.
Multiple updates from Accelerate in recent years promised movement here, but there has been none.
During thunderstorms, the mall – particularly the empty, sprawling grand new wings – leaks like a sieve. Buckets litter practically every corridor.
New managing agents
Accelerate has appointed new managing agents in Flanagan and Gerard, who developed Nicolway, Morningside Shopping Centre, Ballito Junction and Mall of the
North, among others. They replace Mike Pienaar, who was only appointed as CEO of the mall’s internal managing agent in January 2023 and, presumably, Lynette Joubert who he employed as head of leasing. Last year couldn’t have been pleasant.
It has publicly said it will invest R200 million on “repositioning” Fourways Mall. The focus will be on doubling down on the family-orientated aspects of the centre.
This is smart – chat to any parent in the area and they will agree. Already, Bounce, Ster-Kinekor and adventure golf are outperforming versus the rest of the centre. Family-focused events such as Santa Land are massively successful.
It needs to desperately add additional family-focused and other restaurants to the mall, but its current layout makes that very tricky. It would need to add these in the “old” entertainment area adjacent to the movies and new food court.
Perhaps this theme could extend into the “old” mall’s corridor towards that aeroplane shell (and it needs to find someone to take on that lease or get rid of it completely).
In truth, R200 million is not an awful lot of money to address the mall’s problems.
By comparison, Growthpoint will spend R352 million on redeveloping the Bayside Mall in Table View. Bayside is a 45 000m2 centre, compared to Fourways Mall’s 178 000m2 which illustrates just how enormous this task is.
Accelerate is running out of time. The head lease – and with it those effective rental “guarantees” – expires on 29 November.