MPD Africa

Following their involvement in our event focused on development and investment activity across the continent of Africa, and new trends happening, we’ve heard from Jacon McCormick – Managing Director of MPD who have a plethora of development activity across the continent…

Q. McCormick Property Development (MPD) has a particular specialism in bringing forward retail developments in townships particularly in rural and peri-urban areas, how did this model develop and how do your developments support communities in these areas which are often faced by social deprivation?

MPD was the first company to focus on retail development in the rural areas termed the “Homelands” during the apartheid era. Founded by John McCormick in 1983, it has always been a community-focused organisation, partnering with local communities to bring essential retail facilities to the under-serviced areas of South Africa and the SADC.

The development model has shifted multiple times since the founding of the company but our commitment to the founding mission of uplifting communities through sustainable real estate still pervades everything we do.

From community trusts and equity ownerships in the malls to local trading spaces, hawker stalls, taxi ranks, community vegetable gardens and bursary schemes, we work with our communities to deliver what they want and need and then add our own alchemy to deliver retail experience beyond expectations. 

Q. What are some of the primary ways that the property market in South Africa differs from that of the UK and what is key for firms wanting to work in South Africa?

Our expertise lies specifically in the rural retail landscape where retail offerings are more focused on essential goods and services. These areas each have their own very specific and individual identity and thus there is no ‘cookie-cutter’ model that can be applied.

Each development is treated as independent from the other with months, sometimes years, being spent getting to know the communities, their cultures and their expectations.

Taking an industry-level view, South African property differs from UK property in yielding far higher total annual returns (generally speaking), tied into higher interest rates on debt (between 6 and 10%).

Q. You have 15 developments upcoming in your immediate development pipeline, what are the schemes you are most looking forward to bringing forward?

All of them! One of the things that sets us apart from other developers is our passion for what we do. Each development is poured over by the team with tenants and the layout carefully selected to ensure the development is a perfect fit for the area in which it is developed. Even the architecture is carefully designed to tie-in with the culture of the area within which it is built.

That being said, we are extremely excited about reverting to the traditional model of retail centres in the deep rural areas – developments that are between 8 000 and 14 000 sqm in extremely rural areas that have very limited access to any other retail facilities. Building at this size and within these areas allows us to ensure ‘virgin’ (non-cannibalistic) growth for our tenants whilst visibly uplifting the communities served by these developments.

Q. The Coronavirus pandemic has had a generally damaging effect on retail internationally, including in South Africa how has the pandemic affected your approach?

While traditional retail took a knock in the early stages of the pandemic, we were almost run off our feet. As rural retail spaces, the majority of our tenants fall under the ‘essential’ category that were still able to trade. This, in addition to us housing a number of tenants that distribute the monthly social grants (the South African equivalent to the ‘dole’) allowed us to weather the storm better than most.

That being said, the pandemic has certainly given us the opportunity to pause and re-evaluate our strategy and focus for the foreseeable future.  We will continue to develop in the areas that most require retail facilities to ensure basic shopping convenience is available to all.

Q. McCormick Property Development was responsible for one of South Africa’s first black economic empowerment schemes, how did you go about this and how have you continued to drive forward inclusivity since then?

In 1987 founder John McCormick developed Giyani Plaza in Giyani, the then capital of Gazankulu (a semi-autonomous state under apartheid). A share scheme was established to allow individuals to own shares in Giyani Plaza and formed the basis for numerous community-based, co-ownership schemes throughout our history.