$300M For A Mall: South Africa’s Largest Retail Property Development Loan Ever

$300M For A Mall: South Africa’s Largest Retail Property Development Loan Ever

Most areas of South Africa’s commercial and industrial property industries are flat, but one bright spot is retail property development, with several large regional shopping centers under construction around the country, according to a report in BusinessDayLive.

These include the largest retail property development finance transaction ever concluded in South Africa – a loan for more than $300 million with Atterbury Investment Holdings for the construction of the Mall of Africa in Waterfall, Gauteng.

The two-level Mall of Africa will be the heart of Waterfall City, a $4.5 billion “cradle to grave city,” and the largest single private property development every undertaken in South Africa.

The mall will form the hub of Waterfall Business Estate, an 815-acre new city that integrates live-work-shop-eat-play, with retail, offices, homes, hotels, a hospital, light industry, lifestyle and leisure.

In the past six months, Nedbank Corporate Property Finance also closed a significant deal with the Billion Group for the construction of Baywest Shopping Center in Port Elizabeth.

Frank Berkeley, managing director of Nedbank Corporate Property Finance, said finding good deals against which to lend is a key challenge for property finance companies. This can present a risk for those who take their eyes off the longer-term nature of the industry.

“During protracted economic down cycles, a risk facing many property businesses is giving in to the temptation of chasing after risky deals that can come along disguised as opportunities, which is why, in this industry, challenging times typically highlight the importance of proven experience, broad market knowledge, and a long-term view,” Berkeley said.