Dayizenza Mall, Numbi Gate Feasibility Study: Demographics & Retail Potential Dayizenza Mall, Numbi Gate Mpumalanga May 2007 Note: This project should be regarded as confidential as it contains Data, Information and Intellectual Property of Fernridge Consulting - Copyright (Limited Distribution) Copyright 2007: Fernridge Consulting. 1

Objective To determine the optimal development potential for a shopping centre development at Dayizenza, Numbi. We aim to achieve this through the analysis of: Site Dynamics Demographic Potential Site Evaluation Modelling Density Modelling Demographic Analysis Proposed/New Residential Developments 2 Copyright 2007: Fernridge Consulting.

Copyright 2007: Fernridge Consulting Introduction This report aims at assessing the feasibility of the proposed site for a potential new Shopping centre located near Numbi Gate, Mpumalanga. The proposed site is situated alongside the R538. A demarcated catchment area was digitized in order to calculate the number of households in the area. The 2001 and 1996 official census was used to calculate growth for the area. This, together with information from a field visit and aerial photography, comprised the data for calculating the current demographics for the catchment area. The final points of the report focus on our retail potential model which has been followed by an executive summary. 4 Copyright 2007: Fernridge Consulting Copyright 2006: Fernridge Consulting.

Part 1: Demographic Overview 5 Copyright 2007: Fernridge Consulting.

Copyright 2007: Fernridge Consulting Orientation The site is situated in the Mpumalanga Province, North of Witrivier near Numbi Gate (Kruger National Park). Witrivier and Nelspruit to the South form a strong node. SITE 6 Copyright 2007: Fernridge Consulting Copyright 2006: Fernridge Consulting.

Copyright 2007: Fernridge Consulting Study Area The study area comprises of a number of rural households in a traditional area on the Eastern side of the catchment. The Western side is characterised by mainly banana farms. SITE Catchment A catchment was delineated in order to calculate the demographics for the area. All the variables were compared to evaluate this site. The influence of the shopping nodes North and South of Numbi was used to demarcate the catchment. The escarpment to the West also played a role in determining the catchment. 7 Copyright 2007: Fernridge Consulting Copyright 2006: Fernridge Consulting.

Part 3: Retail Potential Estimate 20 Copyright 2007: Fernridge Consulting.

Copyright 2007: Fernridge Consulting Retail Potential Estimate (RPE) 2007 2010 The demographics within the catchment currently warrant a total of ±51,000 m² retail space. This is the total size of the market and the proposed centre will need to be justified through intercepting some of this expenditure. 21 Copyright 2007: Fernridge Consulting Copyright 2006: Fernridge Consulting.

Copyright 2007: Fernridge Consulting Retail Potential Estimate (RPE) 2010 2010 An annual growth rate of 4% was calculated for the catchment. By 2010 the total potential in the area will be ±57,000 m². A centre with a size of 22,000m² will need a 39% market share by 2010 in order to be feasible. This is a very high market share to achieve in order to be viable. We believe a 30% market share is a more realistic capture rate within this scenario. This market share justifies a ±17,000m² centre by 2010. 22 Copyright 2007: Fernridge Consulting Copyright 2006: Fernridge Consulting.

Copyright 2007: Fernridge Consulting Executive Summary The site is well situated to capture support from the surrounding area. It is located next to the R538, which is the main public transport route connecting Hazyview, Witrivier and Numbi. In essence a large number of people will pass the site daily. No complimentary facilities exist near the site, except for the filling station. This issue must be addressed so that a node can be formed. Other complimentary facilities to consider include a post office, clinic, municipal buildings and police station. The centre will need to effectively intercept households that currently shop in Witrivier, Nelspruit and Hazyview (much stronger nodes). The study area is characterized by a strong Dlow (see page 8) income bracket. No direct competition exist within the catchment. The Big 5 Centre caters for a different market. Smaller free standing independent retailers exist within the catchment. A new centre at this site will need to compete with outflow to stronger nodes. The site is located between the two regional centres of Mpumalanga (Nelspruit and Hazyview). Developing a centre at this site may be a challenge due to the proximity of these regional centres. The strength of the surrounding towns limit the catchment and result in a high outflow. We believe that a centre of ±17,000m² GLA can be justified by 2010 (year of maturity). An additional 5,000m² (up to 22,000m²) could be warranted in future as the market grows and the centre establishes itself. The development of a node (and not just a centre) is important in the success of this centre. It must also be noted that a centre only achieves it's full potential after some time mainly due to shopping patterns that need to change. This centre will have to capture 30% of all potential in the area by 2010, and considering outflow and informal retail, it would have to be the dominant centre in the area. We believe that the focus must fall on lower income retail with a Shoprite or Spar as the main anchor. Taking in consideration a benchmark annual trading density of R26,000/m² with an expected 25% capture rate: a ± 2,500m² anchor (selling) will be warranted (within a ± 17,000m² centre). The expected monthly turnover of the anchor will be ± R4,3 mil. 23 Copyright 2007: Fernridge Consulting Copyright 2006: Fernridge Consulting.

Copyright 2007: Fernridge Consulting Contact Details Copyright 2007: Fernridge Consulting Sybrand Strauss (Director) Fernridge Consulting PTY LTD South Africa Tel: 011 712 1720 Fax: 011 339 1833 Cell: 082 330 5168 e-mail: sss@fernridge.ucs.co.za Inus Meyer (Business Analyst) Fernridge Consulting PTY LTD South Africa Tel: 011 712 1732 Fax: 011 339 1833 Cell: 082 742 4656 e-mail: inm@fernridge.ucs.co.za 24