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Jason McCormick has been a regular BizNews contributor following the July riots. The McCormick family has billions of rand in exposure to rural property developments all across the country. A large portion of their property portfolio is held through listed real estate business Exemplar, which recently announced upbeat financial results. Exemplar was one of the most adversely affected businesses during the civil unrest, with five retail malls looted and vandalised. Despite the chaos that unravelled, McCormick confirmed trading conditions have surpassed expectations and the fundamentals of the business are intact. He believes that if these black swan events can be avoided, the business will continue to flourish. He also provides an update on Exemplar’s latest development in Mamelodi, which is expected to complete by 2022. – Justin Rowe-Roberts
Jason McCormick on the malls affected by the July riots:
It has obviously been a tumultuous time for us because we’ve got a business to run, that is continuing to operate. The majority of our business wasn’t affected by the unrest. Five of the 23 projects developments were and we are building other developments at the same time. So, getting our business up and running – those businesses that were affected up and running – has been quite a stretch, but it has galvanised our team. We’re operating at a much higher level now. I think the duress and pressure have been good for us. As I said, these black swans will just get out of our way and let us do our business, we’re now operating at a much higher cadence than we ever have. It has been good for us. Certainly, four out of the five in Exemplar are, to all intents and purposes, rebuilt and we should have those trading at 100% by the start of December. The fifth one, Edendale Mall, hasn’t yet commenced because of the sheer magnitude of the damage. We’re still finalising the nitty-gritty, the minutia on the scope of that rebuild. Fortunately, SASRIA has accepted liability and loss of income and the scope of the others and we’re almost there. The rest of the portfolio is trading incredibly well. We have seen a massive uptick in footfall across areas like Alexandra and Tembisa.
On whether the July riots increased vacancy rates:
More than just the lion’s share; to date, we’ve only got two tenants that aren’t going to renew and they were both SMMEs. We replaced them both with national tenants as, unfortunately, the two of them weren’t able to [renew]. Eighty square metres and 120 square metres [was their floor space]; so, out of the total of 110,000 square metres, about 200 square metres – not a bad loss ratio I would think.
On the latest development in Mamelodi:
It has been fantastic, to be honest. The main building is on-site. The earthworks are mostly complete. We have already started with the construction of the Shoprite. Everything is 100% on programme there. I love rural development as I said to Alec [Hogg] after the riots. It really makes a massive difference. I suppose as long as we continue doing our job well and we keep on looking after our consumers; looking after our communities and looking after our tenants and making sure that they’re making good returns and showing good growth from their numbers, then we hope they continue to support us. That’s the benefits of launching and having a history of launching successful developments where the tenants trade well. You are able to convince them to go to areas they may never have heard of before. I heard that in one of the board meetings, Shoprite CEO Pieter Engelbrecht [said], “These McCormicks, they find places I’ve never heard of in my life.” That’s what we do. We operate in the funky area where angels fear to tread and where people don’t know about. But I tell you what, there are people there with wants, needs, desires and we aim to continue fulfilling those as we progress, certainly from our side.
- Exemplar CEO Jason McCormick on the July riots: ‘There was definitely a massive criminal element. It was proper.’
- ‘Only a heart attack would stop me’- Township mall owner Jason McCormick on Exemplar’s Mamelodi development
- Township mall owner shares the grave detail – Jason McCormick on coming back stronger
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