If you think that rentals are high in the standard South African Shopping centre , consider retail rentals on the corner of Jeppe Street and Delvers Street in the Johannesburg CBD .
A recent workgroup co-ordinated by Hannah Le Roux and sponsored by the Goethe Institute considered the dynamics around certain buildings in the Johannesburg inner city . What is interesting about these buildings is that they are primarily let to Ethiopian retailers – in a sense creating an inner city Ethiopian retailing precinct. These buildings are also a clear illustration that there is scope to convert Johannesburg inner city office space into high rent yielding multi storey retail space. This provides an interesting alternative to the conversion office space into residential space.
While these multi –storey retail buildings may not provide the finishes found in the average South African Shopping centre, they do provide a tenant mix , and rentals that suburban shopping centre investors would be highly satisfied with . The Jo’burg Mall , situated on the corner of Delvers Street and Jeppe Street offers a one-stop retailing experience that includes, food and clothing stores, restaurants, coffee shops, hair dressers and internet café’s.
For the retailer, these properties also provide a wide variety of letting options. While some stores are a mere two square metres , the average store seem to be in the region of twenty to thirty sqm . The point is that the space is reflective of market needs – generally a family run store in this particular environment would find it difficult to stock the standard one hundred sqm store. Moreover by focussing on a few buildings , Ethiopian retailers are reaping the advantages associated with the clustering of economic activity . It includes the creation of an environment in which economic activity can happen in safety.
These buildings illustrate that a built environment that responds to community needs and market dynamics has a role to play in stimulating economic activity and urban regeneration – urban decay largely sets in when this match has withered away . The high rentals experienced in these converted properties suggest that demand is well in excess of supply, and It is likely that with time investors will recognise the investment opportunity and start supplying the market . The pace of redevelopment will also be affected by the ability that city authorities have in timeously identifying and supporting community and market trends.