By Suren Naidoo
Leroy Merlin – the French based and world’s largest home improvement retailer – has made its first foray into the South African market with the opening of a pilot store at Redefine Properties’ Stoneridge Centre in Edenvale, Johannesburg.
Redefine – the JSE-listed diversified Real Estate Investment Trust (REIT) – has hatched bigger plans for Leroy Merlin at Stoneridge, with the construction of a multi-million rand, flagship 17 000sqm big-box store now complete and set to open in September. The mega store covers two floors and has its own parking area within Stoneridge, in addition to a dedicated materials yard and innovative “building materials drive-thru” on the lower level. It includes showrooms; a trading floor; storage area; office space; and, a pick up zone on the upper level.
In a statement on the development released today, Redefine said its development team had to substantially remodel the specification document, which was designed for a European environment. This was done in order to provide a new two-level configuration to suit the South African environment, and ensure consistency of look and feel across Leroy Merlin’s global stores.
While Redefine’s statement did not reveal the value of the new Leroy Merlin mega store development at Stoneridge Centre, Redefine’s Chief Operating Officer, David Rice, confirmed to SA Property Insider at its results presentation last month, that the overall 19,000sqm expansion of the centre represented an investment of around R230 million. Rice said Redefine had secured a second deal with Leroy Merlin for another major store within its property portfolio and was looking to partner with the group for further stores in South Africa.
“Leroy Merlin stores offer a variety of internationally-sourced products with specialised advice and training for customers of any level of DIY expertise. Their stores normally carry anywhere between 30,000 to 60,000 products with Leroy Merlin’s customer focused employees able to offer sound advice on solutions, products and installations,” said the Redefine statement.
Nashil Chotoki, Redefine Properties’ National Asset Manager for Retail said: “The area surrounding Stoneridge Centre represents a prime location for an offering like Leroy Merlin. Over and above the established estates and precincts, massive housing growth is predicated for areas like Greenstone, Modderfontein and Linbro Park.”
Leroy Merlin SA CEO, Cedric Sennepin, said: “It is important for Leroy Merlin to work with serious partners such as Redefine we are confident that we developed a first store that will attract customers from far.”
Redefine said the run-off benefits of bringing big box retail to communities is more jobs for local people as well as spill over traffic for other outlets in the area. Directly and indirectly the home improvement retailer will create jobs for more than 200 people.
Meanwhile, Redefine said it had also secured two lease agreements covering about 5 000sqm with sports lifestyle retailer, Decathlon. This space will be taken up by Decathlon at Redefine’s Centurion Lifestyle Centre and Wilgeheuwel, Little Falls, and would further grow the retailer’s footprint in South Africa.
“International retailers looking to open and expand their presence in the country have already snapped up more than 37 000sqm of prime retail space across Redefine’s portfolio,” it said. According to Redefine, the sports lifestyle category has been the fastest growing retail category in terms of sales and is largely driven by a healthier lifestyle being adopted by South Africans.
Chotoki said: “Big box retail solutions offer a greater diversity of options for shoppers. Consumer trends point to greater support for such convenience centres and we feel that retailers like Leroy Merlin and Decathlon enhances the “convenience” of some of our assets and create a point of differentiation… Leroy Merlin in combination with other new retailers at the Stoneridge Centre will change the profile of the node.”
According to Redefine, spending on home improvement continues to remain resilient despite a sluggish economy, as consumers favour DIY options to save money. “Millennials and baby boomers are choosing to update their homes instead of trading up and in the process fast fashioning a new trend.”
Said Chotoki: “We are proud to be leasing space to global brands like Leroy Merlin & Decathlon. The combination of top quality assets and unique locations is an irresistible proposition for tenants in any economic cycle. We hope to further build a lasting partnership with these brands and are currently exploring other opportunities in the Redefine portfolio.”
He added: “Retailers continue to seek new neighbourhoods where they can achieve great revenue and our projects in burgeoning nodes like Modderfontein and Little Falls offer that density of new traffic that can support their businesses.”
Redefine said it was also in talks with H&M and other international retailers across its larger retail formats.