Retail study Update:
Demographics &
Retail Potential
Xanadu X-ing, North West
May 2007
Note: This project should be regarded as confidential as it contains
Data, Information and Intellectual Property of Fernridge Consulting Copyright (Limited Distribution)
Copyright 2007: Fernridge Consulting.
1
Part 1: Overview
Copyright 2007: Fernridge Consulting.
4
Orientation
Xanadu X-ing is situated on the Eastern
side of Hartbeespoortdam. The town is
situated to the South of Brits in the
North-West province.
Site
5
Copyright 2007: Fernridge Consulting
Copyright 2006: Fernridge Consulting.
Orientation
Xanadu X-ing is a community centre of
±9,100 m² GLA with Pick ‘n Pay as the
main anchor. It is surrounded by a
number of residential developments.
Site
Site
6
Copyright 2007: Fernridge Consulting
Copyright 2006: Fernridge Consulting.
Part 2: Site Evaluation
Copyright 2007: Fernridge Consulting.
11
Site
Xanadu X-ing
To Ifafi/Brits
Filling Station
Planet Fitness
Private School
Netcare Hospital
To Pretoria/Johannesburg
Copyright 2007: Fernridge Consulting
Copyright 2006: Fernridge Consulting.
The site is situated well to intercept traffic.
Developments surrounding the site will
compliment the shopping centre well.
12
Part 4: Retail Potential Estimate
Copyright 2007: Fernridge Consulting.
20
Total Retail Potential Estimate (RPE) – 2007
Primary Catchment
Ave Trading Density (Rand
Total Exp / month
Total Exp / year
/ m² selling per year)
Area Potential GLA
Food & Groceries
R 30,827,879
R 369,934,552
R 30,000
15,414
CFTA
R 10,620,980
R 127,451,766
R 18,000
8,851
Speciality
R 5,789,889
R 69,478,662
R 25,000
3,474
Home
R 7,058,140
R 84,697,686
R 20,000
5,294
Furniture & Appliances
R 6,571,181
R 78,854,177
R 16,000
6,160
Services
R 4,216,511
R 50,598,129
R 18,000
3,514
Outdoor
R 4,592,720
R 55,112,645
R 13,000
5,299
Wine & Dine
R 5,779,185
R 69,350,222
R 25,000
3,468
Hardware / DIY
R 3,991,961
R 47,903,526
R 12,000
4,990
Entertainment
R 1,993,883
R 23,926,592
R 5,500
5,438
R 81,442,330
R 977,307,956
R 18,250
61,901
Main Category
Total Potential
Area warranted GLA
Secondary Catchment
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Copyright 2007: Fernridge Consulting
Copyright 2006: Fernridge Consulting.
21
Retail Potential Estimate (RPE) – Growth potential
- 5 year average growth factor
current housing demand persists
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• Through analysing historical growth we anticipate that the demand in the market within
the catchment will grow each year with 4,416 m² retail space. This increased from 2005
due to a higher growth rate.
Copyright 2007: Fernridge Consulting
Copyright 2006: Fernridge Consulting.
22
Retail Potential Estimate (RPE)
Total Proposed Centre Size
= 20,000 m²
Inflow @ 25%
= 5,000 m²
GLA to be justified by the demographics
------------------= 15,000 m²
Primary Catchment Area Potential (2007)
= 61,901 m²
Secondary Catchment Area Potential (2007)
= 7,289 m²
-----------------= 69,190 m²
From outside the catchment as well as commercial support (such as lodges and hotels)
Total justified GLA
MARKET SHARE (2007)
= 22%
The market share the centre should achieve to justify 20,000m² GLA
Growth Potential by 2010
= 13,248 m²
Assuming developments occur as proposed (478 new households per year)
MARKET SHARE (2010)
= 18%
The market share the centre should achieve to justify 20,000m² GLA
• The centre currently (at 9,100m²) captures only 13% of the market.
• A centre of 20,000 m² GLA will currently have to capture 22% of the market, which is viable, given the
quality of the site.
• The lower market share (as the area grows) required to justify a centre of 20,000 m² by 2010 effectively
increase the feasibility of an extension of the centre.
23
Copyright 2007: Fernridge Consulting
Copyright 2006: Fernridge Consulting.
Executive Summary
• Xanadu shopping centre forms part of the Xanadu Eco Park development, located on the R511 leading into the town of
Hartbeespoortdam.
• Xanadu Eco Park consists of the mentioned shopping centre, adjacent Planet Fitness centre, Netcare hospital, a private
school and ± 1,000 largely permanent A+ income residential units.
• Visibility of the site is rated as excellent given the main road location and elevated nature of the site. The site is
furthermore favorably located to intercept passing trade leading into the town from Pretoria & Johannesburg. The traffic
light on the R511 assist with traffic calming and allow for safe ingress and egress.
• Existing retail around the dam consist mainly of six convenience type centres, including the new Sediba Mall with
Superspar as anchor.
• High levels of outflow exist to larger shopping centres in Pretoria and Johannesburg, especially in retail categories such as
Fashion and Houseware.
• The Hartbeespoortdam-area is one of the most rapidly developing towns in South Africa and growing at ± 9% per annum.
The bulk of the new residential developments are A & B income units and more and more people are permanently staying
at the dam. This also increase the need for a larger shopping centre.
• Based on the growth from 2002 – 2007, we anticipate a short term projection of ± 478 new A & B income residential
units added to the catchment area per annum (2002 - 2004: ±440 residential units added per annum – increased growth
rate).
• The dam is also a very popular holiday / weekend destination and recent traffic counts showed a 50% increase (inflow) in
vehicular traffic over weekends. There is also anticipated commercial support from surrounding farms, lodges and other
businesses.
• On average it takes a newly developed centre time to achieve maturity. This is due to established shopping patterns that
need to be changed. This factor increases the importance of effective marketing, from both tenants and landlords, to
establish the centre (and every individual shop) in the area.
• Taking existing residential potential and the high level of inflow into consideration, we are of the opinion that a shopping
centre of 20,000 m² GLA is currently justified with an achievable 22% market share. (In 2004, a centre of this size would
have to achieve 36% market share – indication of the high growth). A good tenant mix is vital in achieving this.
• When applying capture rates from our previous project with the 2007 demographics, a centre of closer to 30,000 m² GLA
can be justified. The site or rights do not permit for a centre of this size; however, this is indicative of the growing potential
in the market. Ultimately, this is a very good site in a fast growing area with room for future growth.
24
Copyright 2007: Fernridge Consulting
Copyright 2006: Fernridge Consulting.
CV & Contact Details
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
(Namibia, Botswana, Swaziland, Lesotho, Mozambique), other African countries (Zambia, Ghana), 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.
Fernridge Consulting (Pty) Ltd
26th Floor
209 Smit Street
Braamfontein
Johannesburg
South Africa
Fax:
P.O. Box 31266
Braamfontein
2017
South Africa
+27 11 339 1833
www.fernridge.co.za
Sybrand Strauss
Director: Property Development & International
Tel:
Mobile:
e-mail:
Andre Annandale
Manager: Property Development
Tel:
Mobile:
e-mail:
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+27 11 712 1720
+27 82 330 5168
sss@fernridge.ucs.co.za
+27 11 712 1714
+27 82 776 6353
ana@fernridge.ucs.co.za