CONSTRUCTION on the R2bn Bay West Mall in Port Elizabeth has begun, kicking off a development which is expected to have significant economic benefits for the region.
The 87,500m² mall, located on the western side of Port Elizabeth, is a joint development between the Billion Group and Abacus Asset Management, with Murray Roberts the primary contractor.
Substantially black-held property company Rebosis Property Fund will have the option to acquire the mall through its “first right of refusal” to acquire Billion Group assets when they are available to the market.
Rebosis was established by the Billion Group and listed on the JSE two years ago.
Billion Group and Rebosis CE Sisa Ngebulana said while Rebosis was not actively pursuing the acquisition yet, the fund may look at acquiring the asset “down the line”. The construction of the mall, which is due to open in early 2015, is expected to create about 10,000 direct and indirect jobs during construction.
A further 1,500 permanent jobs are expected to be created to staff the 250 retail outlets.
The mall is central to the development of the greater Bay West City project.
Gavin Blows, MD of both Bay West City and Abacus Asset Management, said Port Elizabeth “is one of the last regional retail opportunities available, and this asset class has proven over many years to be the best performing in the property sector”.
Mr Blows said the development was an opportunity “to upgrade and upsize the retail experience for Port Elizabeth and greater Eastern Cape shoppers”.
“We believe the region is ready and has capacity to accommodate this new mall and will be a catalyst to the expansion of the wealthy western suburbs,” he said.
Referring to the development of the Redhouse-Chelsea arterial road which will run through the site, Mr Blows said the city, the South Africa National Roads Agency (Sanral) and the developers “have come together to create a fantastic R300m new road network that will not only bring the region to our doorstep, but will accelerate the residential and commercial growth of this part of the metro”.
Murray Roberts Buildings MD Alex Boyazoglu said the mall was a key project for the group, which was also busy with the construction of Cape Town’s tallest building, Portside.
Nedbank Corporate Property Finance said on Tuesday it would provide funding of R1.721bn for the development of the new regional mall.
Nedbank Corporate Property Finance regional executive Ken Reynolds said the finance agreement was the largest property development sum agreed to by the bank. The mall was central to the greater 300-hectare Bay West City precinct development, he said.