Two videographers give viewers a look inside the spooky R3.5 billion Villa shopping centre in Pretoria, which has been deserted for 15 years.
The Villa Retail Park was the flagship project of Sharemax Investments, a property syndication scheme that collapsed in 2010.
The shopping centre was constructed on the corner of Delmas and De Villebois roads in Moreleta Park, Pretoria.
The Villa Mall was set to become one of the largest in South Africa, competing with the popular Menlyn Park.
It was set to host over 300 tenants across 90,000 square meters of retail space, making it the preferred shopping destination for residents of the area.
The plan was to ensure people chose Villa Mall over alternatives such as Menlyn Shopping Centre and Woodlands Mall.
The precinct would also feature 16,000 square meters of office space and around 5,000 square meters of lifestyle space.
There was a strong focus on being green, which included rainwater harvesting, and a landscape designed with waterwise plants.
A combination of green roofs, photovoltaics, and a roofing material with a high solar reflectance index would have minimised the urban heat island effect.
30% of the cement used in the project was replaced by industrial waste products, reducing the concrete’s embodied energy.
There was also a 20% reduction in structural concrete by using a lightweight facade and internal partitioning.
Construction of the Villa Retail Park started in January 2009 and was anticipated to reach practical completion at the end of August 2011.
However, just as the mall was 75% complete and starting to take shape, the Sharemax scheme collapsed, which stopped construction.
Sharemax collapse halts construction
Construction of the Villa Mall progressed well, but in 2010, disaster struck after the South African Reserve Bank (SARB) stepped in.
Sharemax acted as the promoter where “well-located, prime suburban shopping centres are registered and managed as a single company”.
Therefore, the individual investors obtained a shareholding in a shopping centre with a building as the underlying asset, without a bond on the property.
It sounded great on paper. However, in 2010, the South African Reserve Bank found that Sharemax’s funding models contravened the Bank’s Act.
This intervention halted the flow of funds, and construction stopped when the building was approximately 75% complete.
In 2011, Capicol CEO Paul Kyriacou, which was the construction partner, said completing the Villa Mall would cost between R700 million and R800 million.
However, over the last fourteen years, the Sharemax matter has been tied up in litigation, and there has been no further development at the mall.
The community has regularly expressed frustration with the structure, which is an eyesore in the area.
However, the city could not do much as there are many ongoing legal battles surrounding the Sharemax scheme.
This means the Villa Mall remains completely empty, with no clarity on when it will be completed, if ever.
Nova Property Group financial information
Nova Property Group is the rescue vehicle that was established to manage the properties and assets formerly owned by the Sharemax property syndication scheme
In May 2023, Villa Retail Park Investments, controlled by the Nova Property Group, offered to acquire The Villa.
Nova Property Group CEO Dominique Haese said the group’s goal remains to complete the construction of the Villa Mall.
Haese said repaying relevant Villa Debenture Holders who had historically invested in this project was even more important.
According to the Nova Property Group’s annual financial statements, debentures linked to Villa Retail Park amounted to R690 million.
However, she said this was funding-dependent. Funding to complete the Villa Mall is being pursued.
“Unfortunately, no further details than what has been communicated can be shared at this stage, but any material will be communicated when appropriate,” she said.
In a December 2023 communique, Nova Property Group stated that the goal was to complete the project within 3 years.
To date, not much has happened. Legal entanglements have prevented any resolution thus far, leaving the mall empty and unfinished.
The project has been abandoned for 15 years, and a recent visit to the site found no signs of activity.
Nova Property Group’s annual financial statements
The Nova Property Group’s annual financial statements for the year ended 29 February 2024 raised further concerns about its financial state.
It showed that the Nova Property Group has assets of R2.244 billion and liabilities of R2.360 billion, resulting in negative equity of R90 million.
It means that Nova Property Group is technically insolvent. Simply put, it cannot settle all its liabilities if all its assets are liquidated.
It is not a death sentence. There are situations in which a company is technically insolvent but still able to meet its financial obligations.
However, technical insolvency creates a situation where bankruptcy becomes a more likely outcome if left unchecked.
Nova Property Group reported a loss of R46 million for the year, further weakening its financial position and raising doubts about its prospects.
The Villa Retail Park is the largest asset in Nova Property Group’s portfolio, with a fair value of R750 million.
The property had a purchase price of R1.598 billion. However, a reversal in the purchase consideration and fair value adjustments reduced the value to R750 million.
“The Villa Retail Park has been disclosed at 80% of its fair value based on the last valuations performed,” Nova Property Group said.
The last valuation of The Villa Retail Park was conducted on 28 February 2022 by Mr E Uys, Mr A Steyn, and the board of directors.
Inside the Villa Retail Park
ZARFiles posted a mini documentary on YouTube that goes inside the Villa Retail Park to show viewers what it looks like.
Photos from inside the Villa Retail Park
