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Centres Of Growth www.mccormick-property.com
www.mccormick-property.com
Centres Of Growth Founded in 1982, McCormick Property Development was working alongside black communities long before the Black Economic Empowerment (BEE) programme came into play. Managing Director Jason McCormick tells us more about the company's recent projects, and how its retail developments have impacted the local landscape.
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hirty years ago, black people were forced to live away from the urban economic centres and had to spend a disproportionate amount of their income on travel costs in order to go shopping for basic goods. So, without two brass farthings to rub together, my father decided to set up the company in order to address some of the injustice he saw,” begins McCormick. “He went to First National Bank and got an unsecured loan to build his first shopping centre in one of the black areas. And from that, McCormick
Property was born.” McCormick explains how his father was initially lambasted from both sides. “From the white side, they didn't like that he was helping out the blacks, and on the black side, he was often almost assaulted for being white. But he worked with communities at grassroots level, and did the first broad-based Black Economic Empowerment (BBBEE) model in Gazankulu homeland, which is now Giyani.” McCormick Property offered local communities shares in schemes from as early as 1985, and this dedication to empowering local people — and ensuring the economic benefits of its shopping centres are recirculated within those communities — has remained a cornerstone of the company since its inception. “At the time, these shopping centres were the only significant economic activity in any of the homelands. Everyone worked in the white centres and sent money back home, but there were no jobs back home. In the destitute homelands, these developments became economic beacons of hope,” he continues.
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“All the work opportunities were to be found in the urban centres as far as 100km away. It's actually incredible looking back 30 years down the line at how these areas have developed and how the urban environment has changed. The entire centre of gravity has shifted to around where those shopping centres are. It's a very gratifying thing to see.” Over the last 33 years, McCormick Property has developed 56 shopping centres in South Africa alone, with almost 40 new projectslined up and several new centres opening each year. The next to launch is the Emoyeni Mall in Mpumalanga, set to open its doors at the end of April. “It's a beautiful mall. We've got Shoprite, Pick N Pay, and all the usual suspects in terms of the South African fashion mix,” says McCormick. “It's a typical development for us. We've got two models we work with — our deep rural projects like the Lusiki Plaza are generally open strip malls, or 'reverse claw' designs where it's a U-shaped shopping centre with the supermarket anchored in the centre of the U. In the urban centres, we generally use closed malls. We enclose them when they go over about 25,000 square metres. Below that size, we tend to only have a 2
single supermarket anchor, but above, we'll have two.” McCormick Property is also active elsewhere on the continent, with projects including the largest shopping centre in Mozambique, which is currently being developed in Matola, a dormitory town of Maputo. McCormick tells us how the company's business model is slightly different in other African countries, as communities have not been racially segregated as they have in South Africa. In other African countries, the company operates on what they call the “hub and spoke” model — beginning with a big regional mall in the country's capital, and then branching out from there into smaller secondary towns.
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All the work opportunities were to be found in the urban centres as far as 100km away. It's actually incredible looking back 30 years down the line at how these areas have developed and how the urban environment has changed. The entire centre of gravity has shifted to around where those shopping centres are. It's a very gratifying thing to see.
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“We always partner with local people,” explains McCormick. “Without a strong local partner, it's very difficult to get things done — you'll be seen as someone just coming in to harvest profit from the country without giving anything back. On the development side, our model is similar to the one we use in South Africa. We always use local people for the construction and the jobs are given to local people who work within the shopping centres, so that doesn't change. And we
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also reserve about 10% of the shopping centre for local tenants.”
ratio is less than 1%. The industry average is closer to 6%,” says McCormick. “We've never been busier. We always facilitate local franchises, and give local entrepreneurs space within the shopping centres. It's really gratifying to be part of this. Things are going from strength to strength.”
While the economic outlook for the coming year may be bleak, McCormick Property does not appear to be suffering too greatly. “Against the backdrop of a struggling economy, we're currently building four shopping centres, and will open two this year and five the year after. We've got close to 40 developments in the pipeline, so it's just about riding them out responsibly. In terms of managing our current portfolio, one of the proudest things for us is that our current vacancy 6
Contact Details Contact our office in South Africa Physical Address Lyttelton Road, Centurion, 0157, South Africa
Tel: +27 12 654 6330
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