Spear REIT keen to ‘lean into’ Mitchells Plain – Quintin Rossi
Company sees commercial opportunity in growth of BPO sector
JSE-listed real estate investment trust Spear REIT Limited is exploring plans to introduce commercial office infrastructure to Mitchells Plain to tap into Cape Town’s booming Business Process Outsourcing (BPO) sector, Chief Executive Officer Quintin Rossi told the Cape Chamber.
The move could see the fund utilise unused development bulk rights at the recently acquired Watergate Shopping Centre to bring call centre operations directly to the area's workforce.
“Mitchells Plain has a population of approximately 310 000 people with large household sizes of circa 4.5 people per household as Mitchells Plain remains a retail and residential led sub-economy with relatively little commercial office offerings in the area,” Rossi said in response to Cape Chamber queries about the Watergate acquisition. “The latter (dearth of commercial office space) is also seen as an opportunity by Spear given the demand for space by BPO’s in Cape Town and the opportunity to provide operational opportunities to the embedded labour pool in the area whilst providing the convenience offering of retail.”
“Once the Watergate acquisition has transferred to Spear further due diligences will be done on the depth of the commercial demand and how Spear could lean into that demand either on a nodal expansion basis or integrated into the Watergate property given that we do still hold sufficient development bulk rights to expand the property further,” Rossi said.
However the company’s primary ambition in Mitchells Plain is its newly-acquired retail asset, which is central to Mitchells Plain’s overall retail activity, according to Rossi.
“We have also held the view that Mitchells Plain is one of the areas within the Cape Metro that Spear would seek to hold convenience retail exposure as the identified and recently acquired retail asset namely Watergate Shopping Centre met our strategic and investment requirements of being a centre that delivers high frequency, necessity driven retail consumption to a shopper community that is entrenched in the node,” he said.
Spear also recently acquired Maynard Mall in Wynberg for R455-million, slightly more than the R442 million it paid for Watergate.
According to Rossi, the acquisitions address a structural underweight in retail assets within Spear's diversified R7.2 billion Western Cape portfolio, which spans industrial, commercial, and mixed-use real estate. Rossi noted that the group waited patiently to deploy capital until assets met their strict cost-of-capital requirements.
By focusing on non-discretionary, daily-needs retail the fund is deliberately shielding itself from macroeconomic headwinds, fluctuating consumer confidence, and the volatility of tourism, he said.