Gonubie mall loses tenant – yet again!

Get Pick n Pay or Shoprite as a tenant and cut Spars monopoly in Gonubie and then you will attract more customers.

I will make a prediction here – Call me prophet of doom or what ever… BUT I do not think that EL can sustain the high rental prices that the malls are charging.
I have chatted to a few managers in Hemmingways and rentals for the major corporates are all close to R100 000 per month for the smaller one level shops. I am not talking Woolies etc.. Thats just on R500 000 per month.

The smallest shop in the mall is just on R20K. After Christmas many of these malls will see smaller boutiques and specialist shops close down. What I am amazed by is this. Kings mall knows the situation but rather than drop its rentals to secure more tennants and to make it sustainable for longer they insist on charging the R500 per square meter charges. C’mon guys wake up. But I suppose you will once tennants start closing down !

The mall will not make it unless the owners find a new achor tenant, Gounubie is sick and tired of being ripped off by ridiculously expensives Spar’s Gonubie residents will therefor not make an effort to support the Mall.

I agree get a shoprite or Pick N Pay

Gadget, you are right IMO. I have thought this for some time. It’s all a facade – it’s not sustainable.

Wait until internet costs drop in South Africa and alot more will be shopping online. Shopping online at Pick n Pay is an awesome experience, and the last time I did, they delivered for R50. The time spent in the shop is worth alot more than that for me – not to mention the frustration and effort.

What is desperately needed in East London is a Hypermarket or a Macro.

Gonubie is ideally situated for that

This a sign of the times.
This won’t be the last shop to close.
The high rentals these malls demand is simply too high.
We are in a recessionary cylcle too.
Yet the malls demand big rental and the shops have no shoppers.
A recipe for disaster?

Guys, you’re so right! Get rid of the monopoly with franchises in Gonubie and bring in Pick ‘n Pay or even Shoprite (which is the cheapest) or Checkers. These monopoly franchises in Gonubie are only out to line their pockets, they don’t care about anyone else. As an aside, visited Hemmingways Mall during a holiday to EL and was terribly impressed in some ways and even more disappointed in others. This place has no markers to show what level you’re on and even worse, if you follow the exit signs when leaving, you end up on another parking lot! Coming from Jhb where we have literally hundreds of malls, this was terrible – couldn’t find my way around and I certainly don’t have a problem with directions!

I agree. A Macro or Trade Centre will be ideal in that Mall. It has the outlay and the space. The way the architect designed it is unpractical. Furthermore it is situated in the right spot. We went there twice and it is was a fiasco apart from Baron’s. The Spar is like any other Spar, some products expensive and some unavailable.

Is high rent the only thing that makes the businesses to close down in Gonubie mall?

can somebody that is competent in finance and law and stuff tell me why rentals are so high pls give me a break down; im not business orientated so would like to know why such high rentals? and secondly is it necessary? pls some one enlighten me

Exactly, Brian! – they have to go large now or go home.

And they have to think out of the box and supply shopping experiences we don’t have already.

I have even contacted MACRO to find out if/when they are opening here!

Camy – this is what they do -

They take the cost of the mall…
Look at how many shops they can squeeze in… Then devide the total cost of what it took them to build the mall and devide that by the amount of shops… They amortize over how many years they have fianaced the building… at their 50% profit – rates and taxes, security costs , etc, etc and hand that down to the poor sod who rents from them. So after the building is paid off, they dont drop the rent… You got to be kidding … They escalate it by 10% per annum.

They make BILIONS – I worked out that the monthly rental income at Hemmingsways must be around – R 15 million

@ James. I have just been on the pick n pay online store. It is very tedious. I would rather shop in the store and look at the pretty mommies!!!

@ Gadget and Camy. The bottom line is that developers take the risk when building shopping centres, so they need to get a return on their investments. Also malls have a very limited lifetime before they have to be revamped in order to keep the customers happy. How many times has VP been revamped over the years. But you are right rentals are too high, and I think a lot of shops will go band in the new mall before Feb next year.

Derek, sorry but they are a ripp off. I will NEVER open a shop in a mall. And I would advise anyone who thinks its a good idea to walk away. There are certain shops that will always do well in a mall – P&P, Woolies etc. But they get carried by the national franchises. They can afford a few bad months. As a small individual tennant you cannot. 4 Bad months and they start sending you the bills.

I hear you Gadget, but the vast majority of the population loves malls. Just ask any teenager, thats where they want to hang out. A lot of yuppie moms will also only shop at malls….takes all types.

I know but the teenagaers are at lower end of the feeding chain when it comes to LSM figures. IE they dont have the money to spend. Its guys like you and I that work earn a income, have a business that have the expendable income, and at the moment its a bit bleak. I know someone who quit her job at a bank took all her cash and opened a boutique at Hemmingways. Its not going to last. Its the same old – same old. In Gonubie its Spar, at Hemmingways its clothing. Hell I can only eat and wear so much !

Mabey its a sick plan… You eat more you get fat – You shop for more clothes ???

As I said before, I dont go to Hemmingways. I think since it opened I have been 3 times. Now if they had a iShop or a Gadget shop…. Look now we are talking, but its ….another clothing shop… and another clothing shop….. and another clothing shop…

Yaaaawn

I love Hemmingways!!!! The banks are always quite so can doo banking in a jiffy!!