Durban - Growthpoint, the property loan stock listed company, is undertaking a R60 million upgrade of the 27-year-old La Lucia Mall to maintain its market following the recent opening of nearby Gateway.
The company acquired the R250 million premier north coast shopping centre from the Mines Pension Fund in August, as part of a R1,6 billion portfolio of 52 national properties.
Jeffrey Sher, Growthpoint's fund manager, said on Friday that this had boosted the company from a capitalisation of R100 million invested in nine properties to a R1,7 billion portfolio of 60 properties.
The 12-month construction phase, due to begin in March, will increase the centre's size by 1 750m2 to 35 000m2.
However, Sher said it was too early to estimate the number of temporary and permanent jobs the development would create as tenders had not yet gone out and leases were still being negotiated with tenants.
The refurbishment is expected to draw more monthly shoppers to the centre, which now attracts half a million visitors a month, most of whom live within a 10-minute drive of the mall.
Ronnie Sevitz, the national property director of the Investec Property Group, which is acting for Growthpoint, said the tenant strategy for the fifth phase of the mall's development was to increase the proportion of floor space for the leading fashion stores.
It would also introduce further independent traders focusing on more specialised merchandise.
Some of the additional retail space will be leased by Truworths, which will increase the floor space for its Truworths and Leisure Time Dressing stores from 760m2 to 950m2.
Other existing tenants aiming to expand their outlets include the Foschini Group, Musica and Milady's. Negotiations are under way with potential new tenants including Queenspark and the home furnishers, At Home.
Murray Thompson, the national property developer for Truworths, said the expansion would provide the first opportunity for the branch to offer a full merchandise range.
Sher said the Gateway Theatre of Shopping - Old Mutual Properties' R1,4 billion development - was not considered a threat as it catered for a completely different market and had allocated more than half of its rental space to entertainment.
Upgrading the La Lucia Mall will focus on creating a lighter and more open environment with a triple level sky-lit centre court twice the size of the present one.
"With the property market having been in serious turmoil recently, this is the right time to undertake the development, which is the first significant upgrade to the La Lucia Mall for several years," Sher said.
He said the acquisition of the R1,6 billion portfolio from the Mines Pension Fund had been the largest single property transaction ever on the JSE Securities Exchange.
Forecasting earnings a unit of 12,5c for the 15 months to June 2002, he said the acquisition was expected to boost Growthpoint into the top third of property loan stock companies within the next year.