Gonubie mall decision ends hope for road

the multi-million rand east coast regional mall development proposed for gonubie in opposition to hemingways has been scrapped. the developers are putting the land up for sale.

the decision dashes immediate hopes of gonubie main road being widened from the highway to the mall site – part of the overall scheme – and subsequently into gonubie itself.

in an e-mailed response to dispatch questions, thynk property partners executive director ian burns said they had decided to abandon the scheme following internal decisions and discussions.

“we have, as of last week, decided to sell this site and have offered a mandate to all major property firms in east london to sell on our behalf as we no longer intend developing a centre on this site,” he said.

burns said the property, which consisted of portion 9 of farm 809, had been purchased with business zoning in place. it was first proposed in 2005 and was supposed to begin in june 2006 , with the mall ready for launch at the end of 2007 or early 2008 .

these deadlines were continually shifted. groundwork at the site, which according to thynk’s website was supposed to begin in january this year , was never started.

investec property, who partnered thynk in 2006 to take on the rival billion group’s hemingways mall proposal, had already withdrawn.

“we are no longer involved at all,” explained ronnie sevitz of investec’s property investment arm growthpoint , following queries about the development.

sevitz said they had tried to get the regional mall off the ground but, when the billion group got permission to proceed, they reassessed their position. “our concern was that we didn’t believe the region could support two regional malls, and as such we withdrew,” he said.

the gonubie project, which was to include a general mall with a leasable area of 35000m² and a retail park with a leasable area of 12000m², would have been anchored by one of the major supermarkets, two department stores and a fashion and homeware component, together with an entertainment section comprising fast food outlets and restaurants.

as part of the development the gonubie main road would have been widened to four lanes – from the gonubie offramp to the east coast mall – with the possibility of extending this later into gonubie.

in addition to the regional mall and retail park, the east coast precinct also planned to include a retirement village and a secure residential estate.

independent consultant guy rich , executive manager of gmr strategic management, said the move was probably the right one, as he did not believe buffalo city could support another mall development.

“in the past five years east london has seen a major boom in terms of commercial and residential property development, having gone from having one major shopping mall to having five,” he said.

“the problem is that developments of this nature rely heavily on the ability to secure major and minor tenants to cover development costs, loan repayments and operating expenses.”

rich said failure to secure tenants at the minimum lease or rental price placed the developer in a precarious situation.

“if there is not enough operating capital to cover potential short-to-medium-term losses, taking into consideration the impact of the current development boom and the impact of the global recession, developers face potential financial ruin,” he said.

by derrick spies