Rural retail specialists, McCormick Property Development (MPD), will launch their anticipated peri-urban landmark the Mall of Thembisa, this week Friday 20 November.
Situated on the main thoroughfare of Olifantsfontein road, in the north-western quadrant of Thembisa, Gauteng, the R726 million regional shopping centre offers a broad view of the sprawling township. The 44 809sqm mall features iconic architectural steelwork inspired by ‘Thembisa’ – a Nguni word meaning ‘hope’ or ‘promise’.
We sat down with Jason McCormick, Managing Director of MPD, to unpack the intricacies of the mall and to find out how their flagship development will change the narrative of rural retail by creating both a circular economy and providing a fundamental source of upliftment and support for the community it serves.
What prompted MPD to commit to the Mall of Thembisa, as well as your two latest rural retail developments, Flagstaff Square and Mount Frere, in the Eastern Cape?
We have been committed to rural retail for close on forty years. My father, John McCormick, was the pioneer as he recognized the sheer lack of access to goods and services in deep rural areas.
Back then, people were spending a disproportionate amount of their income on public transport to get to the main urban centres to fulfil their retail needs. It has been our mission to provide access to convenient and adequate retail for all South Africans since our first development in 1983.
The Mall of Thembisa will be our sixty-eighth completed development within the niche market of rural and under-serviced township areas.
According to our market research, Thembisa has some of the highest population growths that I have ever witnessed. 1.1 million people live in the catchment area with an anticipated annual population growth of 5.2%.
This growth is primarily due to rural urban migration as the area is central to the major metropoles in Gauteng and it attracts large amounts of job seekers looking to gain employment in Johannesburg, Midrand, Pretoria and surrounds.
Even though our market research indicated that we could have developed a further 10 000sqm in its first phase, we developed the Mall of Thembisa with a GLA of 44 809sqm. We have always under-scaled our new developments to allow our tenants the benefit of optimal trade and to allow for successful expansions and re-developments as the demand of the area and surrounding communities dictate.
How do you believe the Mall of Thembisa will contribute to the surrounding communities?
A primary factor within each of our developments is the goal to ignite pride and create a sense of ‘place’ for the individual communities within the areas we develop.
Employing local is integral to the success of our developments and, wherever possible, our dictum has always been ‘local first’.
The Mall of Thembisa is no different – well over 70% of our employees on site during construction were residents from Thembisa. This translates into the creation of approximately 2 500 local jobs during construction. We also anticipate that almost 80% of the staff complement of the mall will be residents once we are open for trade.
For the rest of the community, we have some incredibly exciting initiatives at play too. I prefer to not refer to these as ‘CSI’ initiatives because it sounds like something you need to include in your board pack. Instead of spending money on above-the-line advertising, we believe the money would be better spent on the elements that purvey everything that we do and how we interact with our communities.
One of the most exciting initiatives is the creation of a farming co-op on site. I have been wanting to start a farmers’ market for fifteen years and we have finally brought this to life at the Mall of Thembisa.
The site is adjacent to a flood plain of the Kaalspruit where local farmers have been farming the land for years. We have formed a cooperative called Siyakhula with these farmers, creating market gardens growing spinach, beetroot, assorted herbs and more on site. We are working closely with these farmers and providing training for them on an ongoing basis.
We are proud to confirm an offtake agreement with our main restaurant anchor, Imbizo Busy Corner Shisanyama, which allows the farmers to grow and supply the vegetables that the restaurant will serve. We are also in discussions with the supermarkets to create compost from their organic waste to feed back into the market gardens.
In addition, the farmers will occupy a ‘farmers-market’ stall at the taxi rank to sell directly to commuters and customers.
There are two taxi associations in Thembisa – the Thembisa Local Taxi Association (TELTA) on the older, eastern side (closer to Kempton Park) and the Ivory Park Taxi Association (IPTA) on the newer, western side of Thembisa who have been at loggerheads for twenty-seven years. Historically, passengers who arrived at the boundary of one of the associations’ routes would have to step off the taxi and pay a second fare to the next taxi association or travel on foot to cover the rest of the trip.
Through negotiations and mediation, we were able to sit them down at the same table to commit to various route sharing agreements allowing Thembisa residents to travel to the mall on a single fare, irrespective of their point of departure. This will place an extra R36 in our shoppers’ pockets which we hope will incentivize the community to visit the Mall of Thembisa.
On the retail front, we have created the Kasi-CoLAB a township designers emporium which is located in one of the most prime retail spaces in the mall, at the main entrance. The CoLAB hosts ten local designers and entrepreneurs.
We have committed to supporting these local creatives in their first step to getting onto the main stage by showcasing their brands in a modular space. With so much creativity in the townships but little financial assistance, these entrepreneurs need support to excel. We are hoping to nurture them so that their future opportunities may include taking up a store in our mall or branching out into other malls, online and beyond.
We had various other amazing initiatives which we unfortunately had to shelve due to the uncertainty of the pandemic, but we are going to bring these back in the months to come.
Lockdown taught us that human beings are intensely social beings and the yearning for an interpersonal social experience is what will keep customers coming back to our centres on a regular basis.
This is your largest mall to date and your first double level development. Did the construction team experience any new challenges or setbacks?
Double level malls are generally expensive to develop but the nature of this site was that it fell at a substantial angle with the ground conditions being the worst we have ever developed on. It consisted of dolomite which required three engineering PhD professionals assisting us. Effectively, we could have developed an entire shopping centre for the cost of what we had to do in terms of the piling and subterranean elements that went into rectifying it.
When we took this site on, we managed to cut approximately 30% of the original building cost by, inter alia, incorporating a double level mall and in turn, reducing the earthworks cost.
During the lockdown, we experienced 140ml to 150ml of rain in the first month which caused a huge amount of stormwater damage, washing away half of the hill above us. This cost us millions in damage repairs when we returned to site post lockdown.
Developing our biggest mall to date during Covid-19 taught us not only what consequences a lockdown can have on a developer but how a tightly knit team is able to overcome even the most significant of challenges.
But property is a long-term investment and Covid-19 was not going to waiver our investment in the Mall of Thembisa given the quality of its location.
What does the tenant profile look like for the Mall of Thembisa? How will your tenants bridge the gap in retail for the Tembisa community?
There are a lot of tenants that are a first for Tembisa and this variety is our differentiating factor.
It boasts four grocery anchors – Super Spar, Shoprite, Roots Butchery and Boxer. The full fashion and banking gambit are in place and we are excited to have our first Dischem as a tenant.
The location of our centres generally dictates a stronger leaning towards essential services – approximately 30% of the mall’s GLA is classified as ‘essential’ and would be able to trade should there ever be another lockdown.
In addition to the four anchor supermarkets and Dischem, the Mall of Thembisa houses nine banks, a local optometrist, Clicks and a Lenmed Clinic.
The majority of South Africans would argue that we do not need more shopping centres. Why is the Mall of Thembisa different and how will it prove otherwise?
There are small pockets of opportunity that remain in the retail sector and the Mall of Thembisa is undoubtedly one of these.
We see how the shopping centres within our portfolio trade, and we believe there are still a number of opportunities, but they are diminishing and developing in these areas is not easy.
Rural retail brings challenges that are unique. If it were easy, everyone would be doing it. Many have tried to enter this market and they have lost everything because they did not comprehend or understand the mind set and the methodology needed.
We have sites that have taken over ten years to get everything approved due to the lack of infrastructure and other factors but, once your mall has been developed, you suddenly witness how the area around the mall develops with it.
It is amazing to see the community pride and development that takes place once you have taken the decision to invest in its people.
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