tsakane march 08

Note: This project should be regarded as confidential as it contains Data, Information and Intellectual Property of Fernridge Consulting - Copyright (Limited Distribution)Copyright 2008: Fernridge Consulting.

Feasibility Study:Demographics & Retail Potential

Introduction

Copyright 2008: Fernridge Consulting

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This report aims at assessing the feasibility of a proposed site for a new shopping

centre located within Tsakane, Ekurhuleni. The proposed site is situated on the

corner of Modjadji and Malandela roads.

A demarcated catchment area was digitized in order to extract the 2008 Fernridge

Household counts and existing retailers. The site was assessed by physical

inspection as well as aerial photography. Future developments were also taken into

consideration for future growth figures. The final points of the report focus on our

retail potential model which has been followed by an executive summary.

Note: This project should be regarded as confidential as it contains Data, Information and Intellectual Property of Fernridge Consulting – Copyright (Limited Distribution) 5

Macro Orientation


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Tsakane is located in the Gauteng province, between Springs and Heidelberg. Tsakane is situated between the N17 and the N3 highways.

Site

Orientation


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Ekurhuleni is one of the fastest growing areas in South Africa and is characterized by many mines and industries.

Site

Springs CBD

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Site - Detailed view


The site is situated on the corner of Modjadji and Malandela roads. The proposed site is ideally located to capture passing traffic. With limited formal retail located within the area, the main form of retail consist of spaza shops and street hawkers.

Direction of view

Site

Site

Site

Retail Potential Estimate (2007)


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Total Exp / month Total Exp / yearAve Trading Density

(Rand / m² selling per year) Area Potential GLA

R 62,891,786 R 754,701,433 R 30,000 31,446

R 35,314,599 R 423,775,184 R 18,000 29,429

R 14,550,493 R 174,605,915 R 24,000 9,094

R 16,640,194 R 199,682,329 R 20,000 12,480

R 21,011,900 R 252,142,800 R 11,000 28,653

R 10,397,529 R 124,770,354 R 7,500 20,795

R 10,074,570 R 120,894,845 R 13,000 11,625

R 9,069,294 R 108,831,530 R 23,000 5,915

R 16,380,267 R 196,563,203 R 12,000 20,475

R 3,256,742 R 39,080,898 R 5,500 8,882

Total Potential R 199,587,374 R 2,395,048,491 R 16,400

Area warranted GLA 178,793Add 10% for non-retail (banks etc.) 17,879

TOTAL 196,673 GLA warranted by catchment (m²)

Speciality

Home

Furniture & Appliances

Services

Outdoor

Wine & Dine

Hardware / DIY

Entertainment

Food & Groceries

CFTA

Main Category

The current demographics warrants 196,673m² of retail space.

Centre Size (GLA) Market Share

30,000 15%32,290 16%

A retail centre of 32,290m² will have a 16% market share.

Retail Potential Estimate (2010)


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Total Exp / month Total Exp / yearAve Trading Density

(Rand / m² selling per year) Area Potential GLA

R 70,026,829 R 840,321,950 R 30,000 35,013

R 39,321,023 R 471,852,276 R 18,000 32,768

R 16,201,239 R 194,414,873 R 24,000 10,126

R 18,528,016 R 222,336,194 R 20,000 13,896

R 23,395,690 R 280,748,280 R 11,000 31,903

R 11,577,124 R 138,925,491 R 7,500 23,154

R 11,217,526 R 134,610,307 R 13,000 12,943

R 10,098,201 R 121,178,415 R 23,000 6,586

R 18,238,600 R 218,863,204 R 12,000 22,798

R 3,626,217 R 43,514,608 R 5,500 9,890

Total Potential R 222,230,466 R 2,666,765,596 R 16,400

Area warranted GLA 199,077Add 10% for non-retail (banks etc.) 19,908

TOTAL 218,985

Centre Size (GLA) Market Share

30,000 14%32,290 15%

Food & Groceries

CFTA

Main Category

Speciality

Home

Furniture & Appliances

Services

Outdoor

Wine & Dine

Hardware / DIY

Entertainment

GLA warranted by catchment (m²)

•According to 2010 projected demographics there is a total retail GLA demand of 218,985m². •Formal retail in the area makes up only 9,133m² (4% of potential) which leaves an undersupply of 209,852m².•The proposed centre will need to capture 15% of the total market potential in the area. This is feasible, as it still allows for 81% outflow and support towards informal retail.

2010 Demand (m²) 218,985 Existing Formal retail 9,133 Under supply 209,852 Centre size 32,290

• Ekurhulenli is located within the province of Gauteng, located between Johannesburg and Witbank. The area

of Tsakane is located on the southern side of Ekurhuleni, between the the N17 and N3 highways. Ekurhuleni is

known for its large industries and mines.

• The site is situated on the corner of Modjadji and Malandela roads. It is very visible and accessible to passing

traffic and surrounding residents. The site rates as good.

• With very limited formal retail within the area, residents are forced to visit smaller spaza shops and other

shopping nodes outside the catchment to provide in their needs.

• Residential development is at a healthy level within the catchment and a 5% growth rate over the past 10

years has been calculated.

• The projected demographics for 2010 estimate the total retail market size at ±219,000 m² GLA. With the

proposed development at ± 32,000 m² GLA, a 15% market share has to be achieved in order to be viable.

• We believe that reaching this market share is achievable, given the very low levels of competition and the

quality of the site. A centre of this (large) size, at this (good) site, in this (growing, low competition)

surroundings, will effectively dominate the market and maximize market share for retailers to be hosted

within.

• These type of retail developments are becoming more prevalent in townships nationally as this market is

returning to their respective communities for shopping purposes. Jabulani and Maponya Malls in Soweto are

two recent examples of this trend. This bodes well for this particular new scheme in Tsakane, especially given

the massive undersupply of retail as reported in this study.

• A proper transport facility (and break-point) at the site channeling all taxis past the site is vital for the

establishment of a shopping centre at the site.

Executive Summary


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Fernridge Consulting (Pty) Ltd26th Floor209 Smit Street P.O. Box 31266Braamfontein BraamfonteinJohannesburg 2017South Africa South Africa

Fax: +27 11 339 1833

www.fernridge.co.za

CV & Contact Details

Copyright 2008: Fernridge ConsultingCopyright 2008: Fernridge Consulting

Sybrand StraussDirector: Property Development & International

Tel: +27 11 712 1720Mobile: +27 82 330 5168e-mail: [email protected]

Andre AnnandaleManager: Property Development

Tel: +27 11 712 1714Mobile: +27 82 776 6353e-mail: [email protected]

Fernridge Consulting (Pty) Ltd is a retail optimization consultancy that was founded in 2002. We are based in Johannesburg, South Africa and specialize in spatial retail analysis using GIS (Geographic Information Systems) technology, the latest demographic data and information from significant retailers. We are part of the UCS Group, a publicly listed IT company.

We are the undisputed leader in this field in South Africa with ± 12 shopping centre development / revamp studies per month conducted in all nine South African provinces, as well as neighboring countries (such as Namibia, Botswana, Swaziland, Lesotho, Mozambique, Zambia), and abroad (India, Mauritius). We offer this service to banks, landlords, property managers, corporate and private investors and developers.

We also assist some of the leading retail groups in South Africa in their store expansion and rationalization strategies, location analyses etc. Our clients include, among others: Spar, Woolworths, McDonald’s, Nando’s, Mr Price, Supergroup, Massmart, Cashbuild, Ster Kinekor, Virgin Active, Clicks, MTN etc.

This is an objective, independent report with the sole aim of limiting risk for our client and optimize development potential.

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http://www.fernridge.co.za/

mailto:[email protected]

mailto:[email protected]

tsakane march 08

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retail potential

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south africa

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market share

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n3 highways