Investment Required for Development of a Shopping Centre/Mall

The project involves developing a shopping centre in a rural setting servicing a number of villages. The mall would host tenants - national and international brands.

The tenant mix indicated above would ensure that the shopping centre is financially viable and sustainable as the anchor tenants would enter into at least 10 year leases with option to renew, the other national brands would enter into at least 5 year leases with an option to renew, the filling station with a 24 hour convenience store would attract more feet and consumers to the shopping centre. Another source would be the property management side of the business.

As these retailers provide employment to local residents, this would result in social benefits including infrastructure development as this would bring improved lifestyle to the citizens of these villages.

The project would also reduce travelling costs for members/residents of these villages as the nearest town is at least 50 km far away from them. Thus sustainable revenue for the tenants and business on location is guaranteed.

Adequate project planning has been undertaken and is ready for shovel or actual construction within 2 months of an investor being found and committed.

It would take about 8 months for 80% development and the main tenants to start operating with the remainder 20% to take about 3 months as part of tenant installation, finishing touches, and marketing.

Investment required amounts to $5,200,000 for development of land and top structure, including marketing with positive returns of at least 60% ROI and EBITDA of 55% with at least 30% shareholding offered to the investor. 6% interest rate, with a break even or 8 years payback period to a finance loan provider.

It has been proven that shopping centres in rural towns and settings provide a stable, consistent and sustainable positive rental returns to investors

There would not be any direct competition as tuckshops and spaza shop owners would purchase their stock from these national players and thus cut travelling costs for them. The potential competition as stated above is at least 40 kilometres away and there are government offices within reach of the shopping centre; hospitals, clinics, social services departments, police station as workers in these environments would provide a market for the tenants and see value for their investment in the shopping centre as tenants.

As the tenants provide employment, additional customers are created for themselves, ensuring that more and more buyers for their products/services are created and thus their longevity of remaining as tenants as they earn positive returns.

The market of shopping centre in rural settings is still at its embryonic stage and thus for it to grow and reach maturity it would take some time and thus indeed there is room for new entrants which would not necessarily negatively affect the market share.

The investment would provide both financial and social benefits to the investor and operator. As indicated above it provides new markets for national brands and national retailers and new entrepreneurs, which improves local economic development initiatives for rural areas and communities.

This shopping centre provides revenue streams through the rental that would be charged to tenants, the property administration and management services to be rendered inding maintenance of the Centre probably from 5 years as most of the infrastructure would still be new. There has been a number of these centres in most provinces and investor appetite has been positive due to the positive returns and sustainable of these kind of shopping centres given the rural development strategy of th South African government of taking government services to the citizens of rural villages or settings.

I have project management, property administration and management experience/expertize including operations management and customer service management of more than 14 years. i also was born and bred in a rural town and village environment and has witnessed its growth and development including that this shopping centre is around the environment I grew up and reside in.

My commerce qualifications and exposure in working in metropolitan and urban environments managing corporate and regulatory companies would ensure that the knowledge and understanding is used to enhance rural development and local economic development initiatives.

The $5,200,000 investment would be used for:

1. Clearing the land for development
2. Provision of bulk services for the shopping centre
3. Development/Construction of the top structure, thus the shopping centre itself
4. Stakeholder engagement and marketing of the shopping centre
5. Operational cost for the first 5 months

This would be the only amount required for investment as most of the other initiatives would be financed from the returns from the rental and property management fees that would be earned.

This would be the only amount required for investment as most of the other initiatives would be financed from the returns from the rental and property management fees that would be earned.

The investor would earn financial returns and would have contributed to the social benefits that would accrue to the communities that would benefit from the shopping centre.

A 60% ROI, a 30% shareholding offered including a franchising opportunity wherein the investor may be a franchisee with one of the national brands that would be tenants.

A 6% interest rate with an 8 year payback period offered to the finance loan provider again with a franchising opportunity as indicated in terms of the investor above.

It would be preferred for the full investment to be provided but the investor or finance loan provider may have a representative on the board or project management team during the development of the shopping centre.