PRETORIA – Prominent property developer Abland and Barloworld Automotive, a division of listed Barloworld, are jointly developing a R500 million premium A-grade office space above a Toyota dealership at Menlyn Maine in Pretoria.
Called Menlyn Maine Towers, the 15-storey building will comprise a 16 000m² dealership with 12 000m² of premium A-grade office space above it.
Hendrik van Zyl, the development manager for Menlyn Maine Towers at Abland, said yesterday that not only would Barloworld Automotive be occupying the 16 000m² dealership over a 12-year lease, but it was also a 50 percent shareholder in the scheme.
Van Zyl said the development was the first of its kind in South Africa where a dealership had premium A-grade offices above it.
Van Zyl said Namib Gate Investments and Tadvest, which were Abland investment structures, each had a 25 percent shareholding in the development.
He said the dealership that would form part of this scheme would be the 35th dealership it had developed in a joint venture with Barloworld.
Van Zyl added that Menlyn Maine Towers was one of two major developments currently being undertaken by Abland and Barloworld, with the two companies also involved in the development of the new head office for Barloworld Logistics in Irene.
He said it was envisaged that the Toyota Menlyn Barloworld dealership would commence trading in August next year and the speculative office space would be ready for occupation by February 2020.
The rental they would be charging in the building when it opened in 2020 was R155 to R160 a square metre net, which was the average rental at which an A-grade building in Menlyn Maine was currently being rented.
Van Zyl said Investec was providing funding of R400m for the project.
He said the South African economy was a bit “dull” currently, because of some political challenges, but the only way to stimulate a struggling economy was to stimulate growth and development.
Jaco Schreuder, the chief financial officer for Barloworld Automotive, said Barloworld retail strategy changed several years ago in the sense that it coined the phrase “fewer, bigger, better”, which meant the vision for dealerships was that they built mega dealerships in prime locations.
Schreuder said vehicle dealerships were currently facing huge challenges to find a profitable operating model, especially if they operated in high-end nodes such as the centre of Cape Town, Sandton and Menlyn.
He said this had made it extremely difficult to find suitable land and to be able to find a development that made financial sense.
– BUSINESS REPORT