Visitors to the once popular retail outlet in Windhoek’s central business district (CBD), Town Square, are now faced with a shopping centre that has been all but abandoned by the host of retailers that once thrived there. Owners of the centre, Ohlthaver and List (O&L) have attributed the mass exodus of retailers to a depressed economy exacerbated by the devastating impact of Covid-19. 

Moreover, the exit of Town Square’s anchor tenant, Standard Bank Namibia, who relocated their head office to Kleine Kuppe, significantly reduced foot traffic at the centre and this aggravated the poor retail performance.  

“The lack of tenants at Town Square can be attributed to the fact that the property does not have an anchor office tenant that has impacted the foot count as there is a decline in the amount of people visiting the shopping mall,” confirmed Broll Namibia Managing Director, Terence Makari. Broll Namibia is the managing agent on behalf of O&L. 

“The Covid-19 crises aggravated the performances and financial positions of the tenants as some of them had gone through a very difficult three preceding years where the Namibian economy did not perform to expectations and the retail sector was severely impacted by that. To this day, with the uncertainty of Covid-19 still with us, retailers remain cautious to commit to new stores and we remain cognisant of the fact that the absence of anchor tenants does have an impact on these commercial decisions”.

Upon enquiry from New Era, Makari explained the centre experienced the retail vacancy rate increase compared to previous years, even before the exit of Standard Bank at the end of December 2019. 

This, he said, was because of three years of a depressed economy before Standard Bank’s exit. 

“Subsequently, we have seen a substantial number of the remaining tenants exiting due to unfavourably unsustainable performances of their outlets, of which poor performances were also aggravated by the Covid-19 crises. Others were migrated to Wernhil Park as part of the optimal tenant mix strategy aimed at ensuring that the CBD area remains competitive,” Makari continued. 

The Broll MD confirmed ongoing negotiations with more than one potential office anchor tenant. These negotiations, said Makari, have not been exhausted and the intention is to take these negotiations to their logical conclusion at the earliest possible time.   Said Makari: “Retail tenants remain interested in trading from the centre and the ongoing enquiries is indicative of this desire. However, they will only commit to the centre when an anchor office tenant is secured which in retrospection will increase the foot traffic into the centre. Should the office and retail segments not provide the solution in the short-to-medium term, there are possibilities of re-purposing the property for other alternative usages”. 

Makari added that Town Square’s rental rates on offer to potential tenants remain competitive and in line with the market rates being commanded within the CBD area for the retail and office segments. However, rates varied depending on the size of the box to be rented and its location within the centre, for example higher traffic areas command slightly higher rates than others.

Meanwhile, O&L remains confident in Windhoek’s CBD and is of the view that the initiatives being explored such as Special Ratings Area for the CBD, which is spearheaded by the City of Windhoek, will in the medium-to-longer term yield the required results that will revitalise the CBD area. 

“Thus, the inputs of all stakeholders are essential to mitigate the short-term setbacks that impacted business within the CBD area, to enable us to unlock the longer-term opportunities within the CBD,” Makari said.