Feasibility Study Clayville Retail Development September 2006

Feasibility StudyClayville Retail Development

September 2006

Objective

Copyright 2006: Fernridge Consulting (Pty) Ltd

“To determine the feasibility of the proposed retail development on Erf 1616, Clayville Extension 22, Tembisa”.

Area Overview



Land Use MapLand Use Map

Source: 2001 Land use

•The Clayville site is located on the northern fringe of the Tembisa residential areas.• The site is next to the prominent Olifantsfontein Rd. (R562). This road is one of the major link roads between Midrand and Tembisa.

To Tshwane

To Midrand

To Boksburg

Site

The Site


Source: 2002 Aerial Photography & 2006 Fieldwork

The SiteThe Site


Site

TaxiRank

Proposed Freeway

Site

Olifantsfontein Rd.

Proposed Freeway

• The site is located along the current Olifantsfontein Rd.• The new proposed road south of the site will be a freeway with possible access to the centre.• According to Infragen Traffic Engineers this freeway construction will only take place in the distant future.• Access to the centre is still to be finalized.• According to the site layout, provision will be made for only 15 taxis.• The site is not entirely surrounded by residential areas, but well located to capture passing traffic and could be used as a drop - off and pick – up point for workers at the industrial area opposite the street.• A prominent taxi rank servicing the catchment area will be of great advantage to the centre.

All w eights and variables w ere derived from results and conclusions obtained from the f ield w ork

Variable Sub-variable Weight Weight split Rating 1-10 General comments

1 VISIBILITY OF SITE To passing vehicles 15 80% 8 The site w ill have good visibility from Olifantsfontein Rd.

To Residents 15 20% 7 The site is bordered by residential areas in the south and w est.

2 COMPETITION Inside Trade Area 20 70% 7

The Olifantsfontein Cash & Carry retail strip has the most substantial retail offer w ithin the catchment area, follow ed by the Kopanong Centre.

Location (in terms of site) 20 30% 7

The tw o most substantial retail nodes w ithin the catchment area are located north and south of the site, but not in close proximity.

3 ACCESSIBILITY Access from main road 15 50% N/AAccess points are not f inilised yet.

Vehicles (Both directions) 15 50% N/A Access points are not f inilised yet.

4 PARKING Parking facilities 10 100% 7Facilities (Availability / Congestion) 10

5 ACCESSIBILITY From Public Transport Rank 5 100% 7

Limited prominent public transport nodes w ithin close proximity to the site.

6 CENTRE TYPE Neighbourhood / Regional 10 100% 7 Community Centre

7 ORIENTATION Residents w ithin trade area 15 100% 6

& PROXIMITY 15

8TRAFFIC VOLUME

Vehicles 15 100% 8 Many vehicles pass the site daily.

9 COMPLEMENTARY Offices, Other Retail 15 100% 6

FACILITIES 15 0% 0

Poor 0 - 40% EvaluationAverage 41% - 60%

Good 61% - 74% 70%Excellent 75% - 100% Good

Notes: * Failure in any of the above mentioned variables can cause the proposed development to under-perform * Site factors are only one success-determining variable; the operator, marketing, logistics etc are other important factors not taken into account in this evaluation.

The site is only bordered by residential areas to the south and w est.

According to the site layout 5 parkings / 100m² w ill be provided.

The site is somew hat isolated from other nodes, thus the centre should create its ow n node.

Site Name: Erf 1616, Clayville Ext. 22, TembisaTown Name: Tembisa

Site Evaluation ModelingSite Evaluation Modeling

The site rates as good, pending that a prominent taxi rank servicing the residents within the catchment area will be established at the site (for more than 15 taxis). The site’s location opposite the industrial area provides an opportunity to establish a substantial taxi rank at the site.


Retail PotentialEstimate (RPE)


Rand / m² selling per year

Main Category Total Exp / month Total Exp / year Ave Trading Density Area Potential GLA A++ 6R 47,488,000 R 569,856,000 R 25,000 28,493 A+ 19R 28,179,840 R 338,158,080 R 17,000 24,865 A 31R 10,973,030 R 131,676,360 R 24,000 6,858 B 189R 12,572,450 R 150,869,400 R 13,000 14,507 C 1498R 7,950,430 R 95,405,160 R 7,500 15,901 D 9735R 6,737,120 R 80,845,440 R 19,000 5,319 DL 69851R 12,878,250 R 154,539,000 R 9,000 21,464

Entertainment R 2,484,910 R 29,818,920 R 5,500 6,777 Total 81,329 Total Potential R 126,779,120 R 1,521,349,440 R 15,000 124,183

Area warranted GLA

Main CategoryCentre's Capture

Rate Centre GLA Inflow Centre GLA (incl inflow) Monthly Centre

Turnover

15% 4,274 5% 4,488 R 9,349,200

15% 3,730 5% 3,916 R 5,547,906

15% 1,029 5% 1,080 R 2,160,315

15% 2,176 5% 2,285 R 2,475,201

15% 2,385 5% 2,504 R 1,565,241

15% 798 5% 838 R 1,326,371

15% 3,220 5% 3,381 R 2,535,405

Entertainment 15% 1,017 5% 1,067 R 489,217

17,611 19,559 R 24,959,639Centre's Warranted Size m² GLA

Home

CFTA

Speciality

Services

Wine & Dine

Hardware / DIY

2006 Demographics

Services

Wine & Dine

Hardware / DIY

Catchment Area

Food Anchor /s

Food Anchor /s

CFTA

Speciality

Home

Retail Potential Estimate (RPE)Retail Potential Estimate (RPE)

2006 Projected Data2006 Projected Data

RPEModel

The potential estimated size (m² GLA) for the proposed centre:

19,559 m² GLA

Total expenditure per categoryby all the households in thecatchment area

The total GLA potentialfor the catchment area.

The capture rate of the differentcategories within the catchment area.


This model assumes that a substantial taxi rank servicing the catchment area will be established at the centre.

Catchment AreaCatchment Area

Summary


Site & Area Characteristics

• The site is located along Olifantsfontein Rd with good visibility, opposite the Clayville industrial area.

• Olifantsfontein Rd is well used by residents of the area and commuters working at the Clayville Industrial

area.

• The proposed freeway south of the site is not likely to happen in the near future. Olifantsfontein Rd is

however a prominent road linking Tembisa and the Clayville Industrial area with the rest of Midrand.

• The site is well located to capture transient traffic, pending convenient access is provided from

Olifantsfontein Rd.

• The proposed taxi rank at the site will only provide stands for 15 taxis. The site is not located within an

existing node, thus the development should create its own node. A prominent taxi rank catering for more than

15 taxis at the site will aid in the creation of a node, especially if it is used by the Clayville industrial area

workers.

SummarySummary


Catchment Retail

• Only two prominent retail nodes are present within the catchment area: Olifantsfontein Cash & Carry strip

and Kopanong Centre.

• The Olifantsfontein Cash & Carry retail strip has a number of retailers agglomerated within three nodes /

centres. One of the nodes has a small formal taxi rank. This retail strip service the surrounding workers from

the industrial area and residents within the surrounds.

• The Kopanong Centre is centrally placed within the residential area, located along Riverside Rd. which is a

main road through the residential area. The centre size is ± 3,000 m² with a Score, PEP Stores and Barnetts

Furniture as national tenants. A small formal taxi rank is also present at the centre.

SummarySummary


Catchment Demographics

• The greater catchment area has an overwhelming black community with the biggest ratio of residents being

between the ages of 20 and 34.

• The catchment demographics reflects a typical emerging market with a high presence of informal dwellings

and to a lesser extend formal houses.

• The Clayville residential area north of the site is mainly a middle income, medium density residential area

with some growth in the middle income class. This area’s market is expected to support the proposed centre

due to a lack of a one – stop offer in the area and possible strong links with the Tembisa community.

Residents of this area mainly rely on private transport.

• The residential areas south of the site are dominated by lower income, high density residential areas where

residents are mainly reliant on public transport.

• The centre tenant mix should focus on catering for a middle to lower income market.

• Other retailers are mostly small Viva Supermarkets and independent traders scattered throughout the

catchment area.

• The Tembisa retail offer are characterized by a number of retail centres, mostly central to the public

transport nodes and independent retailers and hawkers scattered throughout the area. Tembisa Plaza is the

most prominent retail centre among these with a total size of ± 16,900 m² GLA. Tembisa Plaza is located

further south of the proposed site’s catchment area.

SummarySummaryRetail Potential Estimate (RPE)

• Considering the existing demographics and competitors there is scope for a Community Centre at the site

with a total GLA of ± 20,000m². The estimated centre potential is achievable, pending a prominent formal

taxi rank is established at the site servicing the residents of the catchment area. The site is not located within

an existing node, thus the centre development should focus on establishing a prominent node to maximize

market share and to achieve a 15% catchment rate within the catchment area.

General Comments

• The cathcment area’s southern residential areas have no substantial retail centres such as the proposed

development at the site. A one – stop Community Centre at the site will be the first of such centres for the

area.

• However, the development should focus on establishing a prominent formal taxi rank at the site and create

its own strong node, as the development might be at risk if a similar development takes place more south

within the residential area of the catchment.


Suggested tenant mix ideas:

• Food• Large national supermarket – main anchor ± 3,500m²GLA.• Butchery, Liquor store.

• Hardware / DIY• Spar Build It / Mica

• Service component including Banks / ATMs, Cell phones (MTN/ Vodacom), Cash Loans, Post Office, pension pay-out point if not allowed at the Post Office.

• Furniture• Ellerines• Town Talk• OK Furniture• etc.

• Specialty stores – MultiServ, pharmacy, salon, optometrist, cosmetics, etc.• Restaurants & Take Aways (Wine & Dine)

• KFC / Chicken Licken, Wimpy, Steers, Pie City, Independent restaurant & take aways.• CFTA (Clothing, Footwear, Textiles and Accessories)

• Some national brand clothing stores, but with a small format.• Jet• PEP • Exact

Suggested Tenant Mix:

Tenant MixTenant Mix

In our opinion the Community Centre should have a strong national food anchor. The centre should have a one-stop offer.


The centre should also make provision for independent traders in the area to move their businesses to the centre. However, the national retailers should make out the larger area of the centre.

or

Sybrand StraussDirectorTel: 011 712 1720Fax: 011 339 1833Cell: 082 330 5168e-mail: [email protected]

Andre AnnandaleBusiness AnalystTel: 011 712 1714Fax: 011 339 1833Cell: 082 776 6353e-mail: [email protected]


Documents

Feasibility Study Clayville Retail Development September 2006