Saturday, September 6, 2008

Redefine supports chinese retail in South Africa

01 Sep 2008
JSE-listed property company Redefine Income Fund, has developed a retail centre adjoining the Ottery Hypermarket in Cape Town for a consortium made up of Chinese and local businessmen. The centre has been designed to accommodate tenants who offer for sale predominantly Chinese products.

The idea to build a China Town in the seaport city of Cape Town came after the successful opening of three such shopping centres in Gauteng. Redefine's CEO, Brian Azizollahoff, says that based on this, they were confident that a similar concept would work in Cape Town and would create a different retail asset to complement and enhance the Ottery Hypermarket node.

“The concept was hammered out over various meetings and because we had the opportunity to start from scratch, the Cape Town China Town differs substantially from the Johannesburg models in that it is more like a shopping centre, rather than a market,” says Steve Kruger of the China Town Trust in which the Chinese consortium are partners.

“This kind of development would be impossible without the input of the Chinese partners as many of the tenants speak little English. Also one needs an understanding of the Chinese demands and requirements, as well as their customs,” notes Kruger. The consortium holds the lease over the entire centre which comprises approximately 7,500m2 of gross lettable area, and is made up of 48 retail units varying from 50m2 to 200m2, all of which have been let.

The centre will be a place where importers of everything Chinese; from food products, clothing and household goods, to furniture, electrical appliances and fabrics, will be able to sell their wares to the public and local traders.

Developed for Redefine by Madison Property Fund Managers, all the design aspects of the centre were overseen by the Chinatown Trust.

China Town has been built diagonally opposite Pick n Pay’s Ottery Hypermarket, which building is also owned by Redefine. “The location was selected because of its accessibility to the target market, being LSM 5 to 8 income groups,” explains Azizollahoff. Areas which are within easy access of Redefine's new centre include Philippi, Landsdowne, Claremont and Wynberg. The site of the China Town shopping centre is readily accessible by busses, taxis, and cars.

The principles of feng shui were considered in the design process, explains Jon Mitchell of M & B Architects. This was integrated with successful retail centre fundamentals in terms of vehicle access, orientation and a vibrant courtyard trading concept based mainly on atmosphere and creating a market feel.

The Chinese representation, on behalf of the traders, provided input on the overall design, making changes to the orientation of certain walls between units to ensure that these were not 45 degree angled walls and that the colours of the complex include red roofs and earth tones. Also, a high level of security has been introduced with camera surveillance, roaming guards and spiked access booms.

At this stage, the centre is trading at 90% of its capacity.

Azizollahoff is optimistic about the potential returns on Redefine's R45 million investment. Chinese goods, Azizollahoff notes, are almost and without exception cheaper than the same goods produced in the West. This has led to sectors of every first-world market taking advantage of goods produced in China.