Building on their extensive involvement in the development of the Eastern Cape’s property industry, Nedbank Corporate Property Finance has finalised a R17 million loan with development company, Vargalor (Pty) Ltd, which will help fund a new convenience shopping centre in Lorraine, Port Elizabeth.
The shopping centre, named Kamma Crossing, will be located off the busy Kragga Kamma Road and will predominantly service the middle to upper-income residents of the surrounding suburbs.
Checkers and Clicks have already been secured as anchor tenants and, according to Richard Thomas, regional executive for Nedbank Corporate Property Finance in the Cape, the fact that the development was prompted by the Shoprite Checkers Group itself was factored into the decision to finance.
‘The group recognised a gap in the market in this particular area and secured the land on behalf of the developer – who is already their preferred builder in the region,’ says Thomas.
‘Another factor when considering a loan is strength of management and, while Vargalor is a new entity formed solely for the purpose of developing the shopping centre, one of its shareholders, The Yellowwood Property Investment Trust, is already well known to and respected by Nedbank, so their involvement simplified our decision to approve the loan request once all due diligence had been completed.’
He points to the increase in property development in the region over the past year as an indicator of the steady, albeit gradual, revival in its economic fortunes, and contends that consolidated retail property development could serve as one of the key drivers of this growth.
This sector’s diversification focus is increasingly being reinforced by public and private sector support of, and investment into, sustainable economic growth in the region and will continue to be driven by the 2030 Vision currently being developed for the region by the Eastern Cape Planning Commission.
Thomas notes that retail development partnerships like the one between Nedbank and Vargalor have the real potential to become the bedrock on which such extensive and sustainable economic growth can be built for the benefit, not only of those in the communities immediately surrounding the shopping centres, but for all people and communities in the region.
Hein Swanepoel of Vargalor concludes by adding that the total investment toward the development of the centre amounts to R50 million, with a planned second phase anchored by the MICA franchise, to commence in April 2014, which is also when the centre will be officially opened to the public.