For the purposes of this article we are going to assume the following:
- Our estimate of the daily turnover from the Manganese Ore of R688 901.00 per day is accurate
- If the Manganese Ore moves, the Port of Port Elizabeth, in order to remain viable, will have to replace that turnover with another product
- Most people say that a PE Waterfront will replace that revenue
- We assume an average undeveloped land rental of R10.00 per square meter
- The average size waterfront business will occupy 400 square meters of lettable land
If the manganese ore and tank farm are gone then the land rental would feasibly be much higher.
Lets break our figures down as follows:
- R688 901.00 divided by R10 per square meter tells us that we need to develop 68 890 square meters of lettable land within the Port Limits
- At 400 square meters per business that translates into 172 businesses paying R10 per square meter each.
- The required area does not include roads, services and parking.
In comparison the 90 000 square meter super-regional R2 Billion Baywest Mall is the largest shopping centre in the Eastern Cape. Developed as a joint venture between Abacus Asset Management and the Billion Group, the mammoth mall offers some 250 stores, restaurants and entertainment attractions. Rentals in mega malls can be anywhere between R150 and R1000 per square meter.
The running of the PE Waterfront will bring higher costs and more expensive skills required than the operating of a Manganese Ore facility – along with more clients and the responsibility of high end marketing. So the number of businesses required is probably more than 250 just to ensure that the gross profit margin is maintained.
Another comparison is one with the V&A Waterfront in Cape Town which has over 450 retail outlets spread out over 11 shop precincts.
The burning questions are:
- Can the Port of Port Elizabeth accommodate 250 Waterfront type businesses?
- Can Nelson Mandela Bay support another 250 new retail type businesses?
- Does TNPA have the necessary skills to roll out such a business?
- Will they develop the land themselves and then ask a higher rental?
- Will the TNPA let out a section of land to a developer to develop and run the PE Waterfront?
The main concern is the 250 more retail outlets when just down the road we have The Boardwalk and it’s retail component which always give the impression of not contributing as much to their bottom line as they would like. Some rethink needs to be done to attract money and people to the area from outside our region (like the manganese ore does) in order to support the increased retail area in the region.
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