Business

The multi-billion rand shopping mall in South Africa that is completely empty

Bianke Neethling • 9 January 2025

The owners of The Villa shopping centre in Pretoria, also known as the ‘Ghost Mall’, are still determined to complete its construction despite the building having been abandoned for over 15 years.

Situated at the intersection of Delmas and De Villebois roads in Moreleta Park, The Villa is a R3.5 billion development that has remained abandoned for 15 years with no signs of progress.

The project was one of the ambitious undertakings by Sharemax Investments, a company established in 1999 by Willie Botha.

Sharemax, once a prominent player in South Africa’s unlisted property investment market, allowed retail investors to pool their funds to acquire stakes in prime commercial real estate, including shopping centres.

Despite its promising model, the South African Reserve Bank (SARB) ruled in 2010 that Sharemax’s funding methods violated the Bank’s Act.

The company was ordered to repay investors, which led to its collapse and left many investors with significant financial losses.

The Villa, 75% complete at the time of Sharemax’s downfall, became one of the most prominent casualties of the collapse.

The SARB’s intervention sparked controversy, with some accusing the Reserve Bank of causing the collapse. Others, such as former ombud Noluntu Bam, likened certain Sharemax projects to a Ponzi scheme.

The Hawks investigated allegations of fraud and whether Sharemax was operating a pyramid or Ponzi scheme.

Sharemax’s legal representative, Eckaard Le Roux, dismissed these accusations, insisting the company’s property syndication schemes were legitimate.

Meanwhile, the Companies and Intellectual Property Commission (CIPC) also investigated the matter but has yet to release its findings.

The matter remains unresolved despite ongoing investigations and denials from Sharemax’s legal team.

Before it was abandoned, The Villa was set to be one of South Africa’s largest shopping centres, rivalling Menlyn Park and Mall of Africa.

It comprises a gross building area of 302,744 m², of which 111,285 m² is zoned for offices, conferencing facilities, education, training and retail.

For reference, Fourways Mall, the biggest mall in South Africa, has a gross lettable area (GLA) of 178,202 m², while Mall of Africa has a GLA of over 131 038 m²

The project attracted R1.5 billion in investor funding and was designed to house over 300 tenants.

Construction started in January 2009 and was expected to reach practical completion at the end of August 2011.

However, despite construction being so close to completion, efforts to revive the project have failed, and ongoing litigation has left the mall in limbo.

In 2011, Capicol CEO Paul Kyriacou said that developing The Villa shopping centre would cost R700 million and R800 million.

However, legal entanglements have prevented any resolution, leaving the mall empty and unfinished.

In May 2023, Villa Retail Park Investments, controlled by the Nova Property Group, offered to acquire The Villa. Nova Property Group is the failed Sharemax property syndication scheme’s rescue vehicle.

Nova Property Group CEO Dominque Haese told Daily Investor that the group’s goal remains to complete the construction of the Villa Mall and, most importantly, repay relevant Villa Debenture Holders who had historically invested in this project.

However, she said this is funding dependent, but that funding 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 communique from December 2023, Nova Property Group said the goal is to complete the project over the next three years.

It remains to be seen whether this plan will materialise, as legal entanglements have prevented any resolution thus far, leaving the mall empty and unfinished.

Haese told Daily Investor that legal disputes will have to be resolved, which remain in the process.