Author: ROB THOMASRob holds a master's degree in marketing communications and is a Certified Marketing Director with the International Council of Shopping Centers ArchivesCategories |
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Edgars' Passion for Fashion4/3/2019 Grant Pattison knows better than anyone what’s at stake at Edcon. In a country where retail is a major employer and 27% of the population doesn’t have a job, the company will not see 30,000 people go. An Eastgate function, where Edcon has one of its swankiest Edgars flagship stores, is where Pattison spells out the way forward. “There will be no job losses,” he declares adamantly.
It’s a refreshing difference to what has gone before. Aside from the many jobs, major centres also stand to lose an important anchor if Edcon folds. Between 5 and 10% of the space in large shopping malls belongs to the group, with Hyprop and Liberty facing the greatest exposure. Pattison breaks into shopping centre theory, specifically in reference to Edgars: “We force the customers to walk through the whole mall, to get from one anchor to the next, each of them a destination store. The centre charges everyone in between high rents, because they have to walk past the small stores to get to us, but we’ve lost that role.” That’s not all bad, the CEO says. Edgars has far too much space on its hands, which is one of the problems. At 1.5 million m2, Edcon has gobbled up twice as much space as the next biggest player: Foschini. “The way you opened up a mall in the past was you got a site, you got your rights, you came to Edcon, they signed up 20% of the space, you then ran around to all the other retailers saying, ‘Edcon’s signed up, would you like to come?’ Everyone came and we had a mall. That’s why we’re over-spaced in the malls. These days you come to Edcon and say, ‘Can I have a new store,’ and we say no. And that’s the discussion over. We probably won’t sign a store in the next two years. Until we make a self-sustaining profit, no new stores. There are some relocations and some already in the pipeline, but that’s it. The hard thing to get through the business now is a renewal. Basically it’s close every store on renewal, please come and justify why it should be open.” There will be casualties, like the beautiful store at Melrose Arch, which never really gained traction, necessitating shut doors – one of 200 that have faced the chop this year alone. Pattison’s plan is palpably bereft of sentimentality. The CEO is clearly of the ilk that believes to keep doing what the group did in the past and expect a different outcome is indeed insane. “Edcon has made an unbelievable change, but perhaps it’s not appreciated because it has been done in dribs and drabs over time. Ten years ago we had around 30 individually branded stores (Red Square, Edgars Active and so forth). That occurred because in the 2000-2008 run you could do anything – you could open any store and it worked. But Edcon drifted quite significantly off strategy. Its main business was Edgars and Jet and the credit business (Thank U) – all the other stuff in the end never worked. We thus have a business that is completely reconfigured. We really just run a department store now, with about 200 branches. It’s a single trading brand with departments within it that include home and beauty, Kelso, Free 2BU, and so forth – but no more stand-alone stores. We are thus fully committed to a department store strategy. Some people say it doesn’t work anymore because everyone wants a specialised shop. It’s irrelevant to us because we have no choice. We can’t take our million-plus square metre footprint and turn it into specialised shops. What we are not going to be is an international brand department store like Stuttafords. That model doesn’t work anymore around the world.” Counterintuitively though, isn’t this just really more of the same? Pattison believes not. “These are big changes. We are fixing our store portfolio, and moving everything back into the big stores. There are only three customer-facing brands that we really care about now: Edgars, Jet and CNA. The rest will either disappear, or be fitted into those brands.” Eastgate is a stellar case study. The Boardmans store has closed down to make way for a new Sportsmans Warehouse, which is perfect for the Virgin Active customers at the Eastgate branch. And Red Square has now become Edgars Beauty while Boardmans has become Edgars Home, both inside the main Edgars store. “Red Square is the perfect example,” Pattison explains. “People would say it was the best thing Edgars did. I can tell you it was the most disastrous strategy ever, because it moved customers to the other side of the mall. The strategy was always that Red Square should be close to Woolworths, but it flies in the face of a formula that has worked in retail for over 100 years. Department stores all around the world are anchored by beauty. It sits in the front of the store, and as you walk past people squirt you, and it draws you in. We were really silly because we took the feet out of the store. People would then say to me, ‘I don’t shop at Edgars anymore.’ I’d always say, ‘Yes you do – you just don’t shop at the department store.’” So a significant piece of the puzzle will be to slice the space, though Pattison believes this is not enough. For starters, large two-floor stores in major centres around the country will give up one of their floors. “We’ve become very tough on property, and we have a very strict capital investment philosophy. We went to all 1,500 stores and pruned them. This does not mean we are exiting the market, just reducing our space, and that’s how you get the trading density up. Even so, the big stores work better than the small ones: department stores need to be big, so this is about right-sizing Edcon. We can’t go too small either. We have been to some landlords and said to them, ‘This is a loss making store, we are going to close it,’ and they have come back and asked us not to, and then we negotiate around rentals. We always give the landlords as much notice as possible, and where a store is definitely going to close before the lease ends, we have asked the landlord if they want the space back early. Where we have halved the space, densities have improved. The trick has been to move the feet from the stand-alone store back to the big store. In the process, we have not changed a single lease. This is a capital contribution in exchange for equity by the participating landlords. So instead of paying full rental, we are offering a portion of the business, in terms of shares, to the biggest property owners.” Pattison breaks the discussion up by brand. “For Edgars, we commit back to our private labels being sold in the store brands, with much less space and higher trading densities. Our aim is to bring Edgars back to being a destination store. We are a fashion retailer for everyone. We are back to clothing, footwear, accessories, home, health, beauty and baby. And cell phones. We are the second-largest seller of cell phones in SA, with 250,000 units per month – between us, Pep and Foschini, we basically sell all the phones in the country. For Jet, it’s a return to basics. This brand is like a little department store. We’ve shut down Jet Mart and converted it to Jet, and chucked out appliances, food, and DIY. CNA has been repositioned as a stationery store that also does education. The study guides we sell make up 70% of the market share for the entire country. CNA is a destination for study guides. The space has also shrunk dramatically, but the turnover for stationery and education is already higher than last year, with a 10-15% growth. We are getting out of the shrinking book, magazine and music markets, and also getting out of toys and gaming. Stationery is never going to be a big profit maker, but it offers an important service for South Africa, because where else do you buy stationery?” Other than culling space, Edcon is also focusing on two expenses: mark-downs and IT costs. “In most businesses the biggest costs to company are always staff and rentals. We’ve already got the lowest labour costs, so for us, it is mark-downs. Edgars was always permanently on sale.” Pattison attributes that failing to numbers. “We believe we had the right garments, but the wrong amounts. As such, we do not have a garment problem, we have an amount problem, which meant that we needed to sort out planning and procurement. I will admit that our shortcoming in this area almost destroyed the business, and all our planners left and went to our competitors. Nowadays, we are significantly reducing stock, and we are down to 70% of what it was two years ago. You wouldn’t notice it on the floor because we just always had too much stock.” Edcon’s IT bill is also exorbitant, Pattison believes, and stood at R1.5 billion annually. Thankfully, these costs have been cut by R400 million, but the CEO notes that they need to be cut even more, to R750 million at most – or half what they once were. But of course there is no getting away from the importance of IT, which leads Pattison to the fourth and final brand that Edcon will continue to care about: credit. As an entity, although it involves customers directly, it is not part of the face of Edcon in the same way that Edgars, Jet and CNA are – but its importance is critical to the group’s future success. “Edcon is the biggest retailer credit provider in the country. The Edcon book was worth about R10 billion, with about 5 million customers. We sold the book to Absa, which is now worth R5 billion with 2.5 million credit customers. It was the biggest destruction of value in Edcon ever,” he says, in reference to the aborted deal with Bain. “In effect, we have lost R10 billion in sales. If we just put the book back, then we would not have a problem. That’s really the only thing that has gone wrong with Edcon,” though he admits that the crisis gave the group an opportunity to fix the other stuff. “We have the largest rewards programme in SA – 12 million in total (not all of whom buy on credit) – with a wealth of customer insights. You can imagine how much data we have. It’s a fintech business right for AI. Today, credit sales are again outgrowing cash sales. Credit used to be 55% before we had our meltdown. This went down to 30% and is back up to 35%. We now have proper risk management and debt management in place. It is still somewhat dependent on Edgars and Jet, but one day we can turn it into cash. It is the most valuable part of our business, and it makes quite a large profit.” Over and above the three customer-facing brands and the potentially lucrative credit book, Pattison shares that a small head office will remain, with a strong devolution of power. “Edcon was very centrally controlled, and past CEOs ruled with an iron fist. We are inverting that now and decentralising the business, with the move to a more federal structure. I’m no longer the king. There will be less of me and more of the four CEOs who oversee these great brands.” He believes it is infinitely better. “One day if we want to and it suits us, and it’s what our shareholders want, we can break it up and sell Edcon’s four pieces – four very good stable businesses.” In closing, Pattison summarises. “The R4 billion capital that we used for our international brand strategy was wiped out, which is why we are moving back to private in-house brands and labels. There are two ways to get Edcon profitable again: put back the R10 billion worth of credit sales, which is not going to happen; or reduce IT, rent costs and mark-downs by R2 billion, which is what we are doing. Other than that, the strategy is simple. One, how do you drive overall sales? You have to get the fashion right in terms of size, not desirability. Two, push credit sales, where we give credit, mature it for 12 months, and then sell it to a third party.” The final – and most important – part of the equation brings Pattison back to where he started: staff, and the preservation of those jobs. “All of this has been a considerable exercise in change management. Twenty years ago, fashion was someone telling you what you should be looking like; fashion today is individual self-expression. And we have conveyed that in the strongest possible terms to our staff. We have said to them, ‘You must express yourself through this business; you must act entrepreneurially; you must be creative; you must be collegial and collaborative. If you can see yourself fitting into this, great. If not, come see me and let’s talk.’” Edcon, it seems, is in skilled hands, which bodes well for the choppy waters it continues to steer for now.
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In March 2019, Eastgate, SA’s first-ever super-regional centre, turns 40.
It’s a milestone that in a sense marks the beginning of an era and a culture that the country, and indeed the world, is still in the grips of. But the question remains: how relevant are super-regional shopping centres today? Perhaps it is useful to start with what exactly a super-regional centre is. It is an enlarged regional centre, with a bigger retail offering (and today, that includes a hefty amount of lifestyle or experiential space). The International Council of Shopping Centres (ICSC) stipulates that such centres must have a GLA of 80,000m2 or more, while the ICSC and the Urban Land Institute, amongst others, have declared that such centres must also have at least three to six anchor tenants making up at least 50% of the GLA. In addition, such centres must be sustained by a minimum population of 300,000, will pull shoppers from at least 20 kilometres away (who are willing to drive for at least half an hour to get to the centre), and who will typically stay for at least an hour, possibly two, maybe even more. Urban geographer Hartshorn purported that a shopping centre’s size reflects its social function within an urban hierarchy. He specifically mentioned “mom-and-pop” street corner grocery stores as being the counterpart of the hamlet, the neighbourhood centre the counterpart of the village, the community centre the counterpart of the town and the regional centre the counterpart of the city. By extension, and as confirmed by others, the super-regional centre is therefore the counterpart of the metropolitan area. In 2002, Dirk Prinsloo from Urban Studies, in conjunction with the SACSC, came up with a new set of benchmarks to denote what constituted a super-regional centre. It was declared that such centres needed to have a GLA of 100,000m2 or more, a criterion that Eastgate more than adequately fulfils today. But when it opened with its 90,000m2 back in 1979, it met the requirement as set out by the ICSC at the time. The history of Eastgate starts in 1976, but in effect, some 20 years before that. Although marketplaces all over the world have been around for thousands of years, the shopping centre in its modern form is a distinctly North American invention. Thus it was, back in 1954, that Allied Stores’ Northgate opened in Seattle. Two years later this was followed by Southdale Mall in Edina, a suburb of Minneapolis, where Victor Gruen’s grand vision of the first suburban climate-controlled shopping centre came to be. Astute developers and observers in both South Africa and Australia began to see the potential for creating large suburban complexes in similar markets to North America (though at the time this only applied to certain markets in SA, given the context of a racially divided country). Johannesburg’s Southdale was opened in 1962, Hyde Park in 1969, Sandton City in 1973 and Cresta in 1976. Today, Sandton City’s labyrinthine 141,000m2 (retail GLA, excluding offices and hotels) belies its start as a small 20,000m2 regional centre on the northern outskirts of the Johannesburg metropolitan area. Plans for Eastgate were much more grandiose. Proposed was the 90,000m2 behemoth, the likes of which had never been seen before on the continent of Africa, and which at the time dwarfed Sandton City and every other centre in the country. It was hailed as the largest shopping centre in the southern hemisphere, and the Financial Mail wrote, a week before its opening, that “…it certainly is the largest shopping centre SA has seen – or is ever likely to see.” That prophecy turned out to be wholly wrong, but what is also interesting to note is what a shopping centre cost to build 40 years ago. In 1976, the projected cost of Eastgate was R40 million, which had escalated to R50 million by 1979 (one thing that hasn’t changed in 40 years is the fact that estimates and actuals seldom pair up once the concrete has set). Margoles Dukes & Smith (MDS today) did the architecture, Rapp & Maister undertook the construction, and DI Design of Toronto did the interiors, very much modelled on shopping centres in North America. The site was less than ideal from a construction point of view, being located in a valley on a swampy piece of land (unlike the strong Parktown shale that Sandton City sits atop). But its location was flawless, and groundbreaking in many ways. Firstly, the newly-constructed airport highway (the R24) had just been built, connecting the centre to the then Jan Smuts Airport (subsequently Johannesburg International, and today OR Tambo). Nary a kilometre away was the mighty Gillooly’s system interchange, which connected the N3 eastern bypass (built in 1971) with the R24, providing Eastgate with access to the entire eastern side of Greater Johannesburg – one of its key success factors, since the car is critically important to the sustainability of large suburban shopping malls. Like Eastgate, it was purported to be the busiest interchange in the southern hemisphere. To add fuel to the fire, the centre enjoyed direct access into its northern parking area from the highway, which made it super-convenient. It was a textbook development, as one of the other criteria for super-regional centres is that they should enjoy access to a metropolitan area’s transport system. Ken Romain’s book Larger than Life, the story of Donald Gordon and Liberty, further recounts the tale of the centre. Eastgate was initially a joint venture between Liberty Life and a company called Summit Construction, which had run into heavy financial troubles (Eastgate’s construction began in the same year as the 1976 Soweto Uprising, which cast a pall of doubt on the economic future of SA, and was a short three years after the 1973 Global Oil Crisis). The 50% of Eastgate that Summit owned ended up in the hands of Nedbank, one of its creditors. At the time, Nedbank wanted to get rid of its 50% share of the centre, which it labelled ‘an albatross’ (around its neck). Liberty bought the 50% stake for a mere R27 million, and by 1988 the centre had been valued at R300 million. Nedbank’s involvement in shopping centre development since then shows that they have certainly learnt their lesson, while Liberty (today incorporating Liberty twoo degrees, a REIT), is understandably pleased that 100% of Eastgate is owned within the Liberty stable. “Will Eastgate succeed?” That was the big question asked by the Financial Mail back in 1979. Tales of white elephants had done their rounds. But the public’s love of the centre was unanimous. “Eastgate bars uit sy nate uit” was the headline in the Beeld newspaper the day after its opening, which saw a whopping 80,000 shoppers descend on the centre, eager to browse in and buy at its five anchor tenants (Woolworths, Edgars, Checkers, OK Bazaars and Greatermans) and 200 line shops. The centre also sported a Ster-Kinekor cinema complex, but cinemas were not regarded as anchors back in the day. While there have been bigger openings since then (most notably the estimated 120,000 people who made a beeline for Mall of Africa when it opened in 2016), Eastgate was wildly popular, regularly drawing people from as far afield as Grootvlei in Mpumalanga, a small ‘dorp’ on the N3 to Durban easily 100 kilometres from Johannesburg. All but one of the anchors remain (Greatermans became Stuttafords, which eventually closed down, and whose space has subsequently been taken by H&M), with both Woolworths and Edgars massively expanding their flagship stores at the centre. Eastgate has been pioneering in many ways. Professor of geography Keith Beavon believes it was one of the reasons for the demise of the Johannesburg CBD as a first-port-of-call shopping destination (although today the CBD is successful in a different form). Its runaway popularity gave developers the confidence to try out the concept in other parts of Johannesburg and other SA cities, with equally eye-watering success. It spawned four other gates: Westgate in 1985, Highgate in 1988 (now China Mall), Southgate in 1990 and Northgate in 1991. Although Cape Town’s Sanlam Centre in Parow opened before it, it was not until Tyger Valley opened in 1985 that Capetonians got a taste of big shopping centres. Durban had to wait until 1993 with the opening of The Pavilion, which in some cases was a textbook carbon copy of Eastgate: situated on the N3 with direct access at the St James Rd off-ramp, it is also a mere kilometre from the EB Cloete system interchange (locally also known as Westville Four-Level or Spaghetti Junction), which connects the N3 main road to Johannesburg and the N2 Outer Ring Road, Durban’s two highest-order roads. The Pavilion in turn was the pioneering catalyst that gave rise to even grander shopping atriums like Gateway. The largest centres in the country’s urban areas all owe their existence in part to the early pioneering success of Eastgate, including Baywest Mall (Port Elizabeth), Loch Logan (Bloemfontein), Hemingways Mall (East London), Liberty Midlands Mall (Pietermaritzburg), and Mall of the North (Polokwane). Even London’s retail scene was impacted by Eastgate, when Donald Gordon continued his “run of luck” with Liberty International and Capital Shopping Centres (today Intu Properties plc), which saw the opening or acquisition of a number of UK centres, including Lakeside, adjacent to London’s M25 orbital motorway. If the concept worked in Johannesburg, why wouldn’t it work for London’s out-of-town regional centres? Eastgate has been written about in books and text books, fondly labelled as “the people’s mall,” and émigrés in far-flung corners of the earth have stated it is one of the things they most miss about Johannesburg. It has also spawned the careers of some people in the shopping centre industry, including Dave Kavanagh (the GM at the centre who recognised that the shopping centre concept had become like the village square of old), who went on to manage Carlton Centre; Neville Koen, who ended up working in the Middle East; Mike Rodel, who became the manager at Gateway; and Wayne Abbeglen, who became the manager at Canal Walk. In an old photo, there is also a bunch of people from the leasing team standing around a model of Eastgate. One of them is a very young Patrick Flanagan, who of course went on to form Flanagan & Gerard, the company responsible for centres such as Nicolway, Heidelberg Mall, Middelburg Mall, Highveld Mall, and Springs Mall. Eastgate also pioneered a marketing coup or two in its day. When the centre first opened, there was no such concept as a marketing team. There was one lone PRO (public relations officer), and that was Maureen Harbor back in the good old days. The centre’s then logo was understood by some to be an icon of the Gillooly’s interchange, which had underpinned so much of the centre’s success. It was Harbor who confirmed that it was actually the “E” and the “g” which had been inverted to create a mirror image. Research at the centre showed that this logo enjoyed a 40% recognition level by the market – unprecedented at the time, and completely unheard of in today’s information-overloaded world. In the years after its opening, it ran an advertising campaign which was a tongue-in-cheek homage to the Mary Poppins song “Supercalifragilisticexpialidocious,” called “Supermultihypershoppingextraultraspacious.” During SA’s hosting of the 1995 Rugby World Cup it ran a campaign with copy that read, “This Rugby World Cup, come to the maul.” Finally, Eastgate also enjoyed the longest run as the country’s largest shopping centre, from 1979 to 1996, just pipping Gateway (2001-2016), and much longer than Sandton City (1996-2000), Canal Walk (2000-2001) and Menlyn (2016-present). It remains one of the largest shopping centres in the country, with a retail GLA of almost 137,000m2 (increasing to 145,000m2 if the office block is included). It is the third-largest centre in Johannesburg (behind Fourways Mall and Sandton City), and preceded five other super-regional centres in the city: Fourways, Sandton (opened before Eastgate but only grew to become super-regional in 1984), Mall of Africa, Cresta (also opened before Eastgate but only grew to become super-regional in 2014), and Westgate. In a post-modern SA, with apartheid long gone, the regional centre concept has also been wholeheartedly taken up in the emerging market, with shopping centres aplenty in the former townships – and with suburban integration, newer centres like Mall of Africa owe their success to the emerging (or emerged) Black middle class, who continue the love affair with malls. In the midst of all of this, change is afoot. With new centres offering blended retail and experiential spaces, and with a higher focus on lifestyle anchors, super-regional centres will need to embrace this trend more and more if they are to remain relevant as the third decade of the 21st Century approaches. History shows that Eastgate will probably be one of them. Sources: Southern African Shopping Centre Directory, Levy & Weitz (Retailing Management), Hartshorn (Interpreting the City), Eastgate, Urban Land Institute, ICSC, Ken Romain (Larger than Life), Financial Mail, Geoff Earnshaw (The Mall), André Viljoen, Shopping SA, Dawson, Business Tech
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With great thanks to Joshua Schumacher of Skyscraper City for the image above.
The skyscraper is the ultimate tool for bragging rights. Flagship buildings, which define skylines and often create icons used to brand and identify cities, are a common symptom of the desire to build ever-taller odes to commercial growth, which come laden with oodles of bragging prowess. It’s not for nothing that the new One World Trade Center is a symbolic 1,776ft tall (541m), designed to remind America and the world of the indomitable American spirit in the face of the September 11 attacks, while at the same time harking back to the year of their independence: 1776. The longest (and tallest) bragger, of course, was the Empire State Building, which held the record for the tallest building in the modern world for 40 years, from 1931 to 1972. It was unseated, very briefly, by the iconic (and now destroyed) twin towers of the original World Trade Center, also in New York, between 1972 and 1974, when Chicago took the title with its Sears Tower, unceremoniously re-christened the Willis Tower. In 1998, just before the turn of the millennium, and in the wake of the Asian Tigers’ growth, the crown passed, rather controversially, from there to the Petronas Towers in Kuala Lumpur. It has never returned to the west, and probably never will. In 2004 came the turn of Taipei 101, which managed to hold onto its crown until 2010 with the opening of the Burj Khalifa. By 2020, the title gets transferred to the 1km-high Jeddah Tower in Jeddah, for now… There can be no doubt that there are plans in the works to build something even taller really soon. The Dubai Creek Tower, at over 1,300m could be it (the Burj Khalifa is 828m). Back in Johannesburg, the Carlton Centre’s reign as Africa’s tallest building is well under threat, but in Jozi, “the creeping high ones” have not yet managed to top the 223m that Carlton boasts, sitting as she does atop the once gold-laden earth beneath her. In a Sandton-esque district of Nairobi known as Upper Hill, a new 300m edifice called The Pinnacle has broken ground. Once complete, it will give Kenya bragging rights for Africa’s tallest building. When it opens, the East African powerhouse will no longer be playing catch-up to the people of the south. It is, as they say, grabbing the lowest-hanging fruit, since it doesn’t take much to top the Carlton’s 223m. Locally, though, in all likelihood, the next contender for Jozi’s tallest building will come from Sandton, and it might even be here now (more on that a little later). The writing was already on the wall the same year the Carlton opened, back in 1973. Carlton came complete with a 50,000m2 regional centre, at the time one of the largest in the metro area. Keith Beavon, professor of geography at both Wits and Tukkies, has written copiously on the changing retail landscape in Johannesburg, and declared that the Johannesburg CBD as a retail powerhouse was already under threat when Sandton City opened the same year as the Carlton Centre. A cheeky upstart building of some 20 storeys suddenly punctured the sky in the mink-and-manure belt to the north of Johannesburg, in the newly proclaimed town of Sandton. Technically it was not a skyscraper. The Council on Tall Buildings and Urban Habitat (CTBUH) defines one as a building of at least 150m. But it stood out like a sore thumb on the rural Highveld, the vision of Donald Gordon and Michael Rapp, amongst others. The history is well documented in several books and online. At its base was Sandton City, arguably still SA’s most recognised shopping centre brand. Also arguably, Gordon and Rapp, amongst others, set off a chain of events which turned Sandton into the new Johannesburg CBD – and with it, came all the tall buildings that would have stayed downtown – the last tall building to be constructed in town was the Johannesburg Sun, opened in 1986, and since mothballed. For a while, Sandton City’s 20-storey office tower led the pecking order, with about 100m of height – no challenge to the Carlton, of course, or half a dozen other buildings downtown. But it was pre-eminent in Sandton. However, it wasn’t long before a contender shot up that challenged Sandton City’s dominance. It was the RMB building at One Merchant Place, complete with its spire, also at about 100m. Not to be outdone by any measure, the powers-that-be at Sandton City decided to add a roof to their tower, in an effort to raise its height, complete with green lighting so that it could be seen across the metro area. This green beacon made its debut, and was included in a print advertising campaign with a maze-like drawing signalling roads to the centre from nearby shopping competitors. Once again, the mother hen presided over the proverbial Sandton roost of taller buildings. But alas, ‘twas not to last. The centre’s office tower came under fire again when the Michelangelo Towers was completed in 2007, which raised the bar to 140m, and ensured that Sandton City could no longer claim its title as the tallest building in the area. In response, Sandton City added a spire to its roof, taking its final height up to 141m – just a metre taller than the Michelangelo (though some sources put that building’s official height at 146m, not 140m). And again, the centre cleverly used the fact that Sandton’s office tower was the tallest in the area as a publicity angle, which gained it some more column inches. These days, the green has been replaced by hues of red and blue, which change colour as the night draws on. Sandton, it seems, has finally caught up with the likes of the Empire State Building and the Eiffel Tower, resplendently dressed in colour for the night skies, which changes to mark important calendar days like Christmas. Sandton City’s strategic thinking was not the first time the intergalactic bragging contest of the skyscraper had come to the fore. Almost 100 years ago, the race was between the Bank of Manhattan and the Chrysler Building, both in New York – that epitome of the competitive city, which it probably still is today. In her seminal work on tall buildings, Judith Dupré’s Skyscrapers recounts the tall tale. Walter P. Chrysler, he of the motoring empire, told the architects, including William van Alen, “Make this building higher than the Eiffel Tower,” which was 300m, and had held the world record since 1889. However, to dupe the competition, the originally announced height of the Chrysler Building was 282m. The Bank of Manhattan made their building’s final height 282.6m, just to ensure that they were the tallest. What they didn’t know was that, secretly, van Alen had constructed a 37m spire in the Chrysler Building’s fire shaft, which was hoisted into place just weeks after the Bank of Manhattan had reached its final height, making the Chrysler Building, at 319m, not only taller than both the Bank of Manhattan and the Eiffel Tower, but also the tallest building in the world. The victory was short-lived, however, as the Empire State Building, at 381m, was opened a year later, in 1931. Art Deco had conquered the world. Because of the Great Depression, there was a slump in the construction of tall buildings – part of the reason the Empire State held the record for 40 years. Of course, the inclusion of spires is also highly controversial. The CTBUH has made the determination that spires may be included in height calculations because they are architecturally part of the building, while radio masts and TV antennae may not be, for the same reason. Thus when the Petronas Towers became the tallest buildings in the world in 1998, there was a hue and outcry from Chicago when the Sears Tower was dethroned, because the latter had a higher rooftop height than the Petronas Towers and also much higher antennae, but the Petronas Towers, because of their spires, became taller than the Sears (now Willis) Tower. What is also interesting is the synergistic relationship between skyscrapers and shopping centres. At the foot of the Burj Khalifa is Mall of Dubai, the world’s largest centre in area (though not in GLA). The office tower at Sandton City has the mall beneath it (and there were plans at some stage to construct a 285m edifice on the corner of Rivonia Rd and Fifth St, atop the centre’s undercover parking). The new World Trade Center in New York, again the tallest building in the western hemisphere, has the Westfield shopping centre at its base, with its iconic whalebone design. The Carlton has the regional centre at its base, still the largest in the CBD. The Michelangelo, formerly the tallest in Sandton, is connected through a maze of malls to the Sandton City-Nelson Mandela Square complex. And the Leonardo is in the heart of Sandton, straddled between the new developments at the old Village Walk site, Deutsche Bank and the JSE. Even though Sandton City’s dominance is not likely to continue now, with the construction of the Leonardo, the building was by no means alone in its desire to be the highest. Tall buildings were a coveted status symbol, wrote Dupré when her book was released the same year as the Petronas Towers opened, back in 1998, now some 20 years ago – and nothing has changed. Dubai has used the Burj Khalifa’s position as the tallest building in the world as a marketing centrepiece bar none. Speculation is rife as to the final height of the Leonardo. James Ball’s coverage of the momentous occasion when the Leonardo became taller than the Michelangelo back in April this year is well documented on The Heritage Portal, where he christened the Sandton City Office Tower, the Michelangelo and the Leonardo “The Big Three.” The Leonardo was originally marketed as 150m with 42 floors, just making the grade for true skyscraper status and turning it into the tallest building in Sandton. Some sources suggest the original height was 188m, with 47 floors. Legacy (owners of the building) announced, due to demand, that the floor count had been revised to 55 floors, sparking further interest as to whether the building will top the Carlton to become Africa’s tallest. One wonders if the developers are holding mum and keeping the final height a closely-guarded secret, as was the case with both the Chrysler Building and the Burj Khalifa. “This is Legacy we are talking about,” says a source. “They don’t build without a plan, and I don’t see how they wouldn’t take advantage of the PR hyperbole around creating the tallest building in Africa. Perhaps they will announce it once they are topped out.” Other sources say that the Leonardo will likely rise to 238m to become the tallest in Johannesburg and SA. The most accurate source, from the CTBUH, puts the final height at 227m, pipping the Carlton by just 4m. The last little bit of height might come from the building’s spire, however, which means, like the Petronas Towers/Willis Towers debacle, that the Leonardo may have a lower rooftop than the Carlton but still be deemed to be higher by virtue of its spire, thanks to the CTBUH. But even if it doesn’t outrank the Carlton, the building is, in all likelihood, going to be some 200m tall, which will easily make it the second-tallest building in both the city and the country. For now… Interestingly, in 1999 property analyst Andrew Lawrence hypothesised that the tallest buildings in the world have been constructed at the cusp of an economic downturn. The theory, known as The Skyscraper Index, was first proposed by Lawrence in a paper where he spoke jokingly of Faulty Towers as a play on the name of the TV show. The theory has since been expanded to include the tallest building in individual cities on a microcosmic scale (not just the world on a macrocosmic one). And although the theory has been dismissed as unscientific, it does appear to hold water. The Empire State Building was built in 1931 on the back of the Great Depression; both the World Trade Center and the Sears Tower were topped out around the 1973 oil crisis; the Petronas Towers became the tallest in the world at the time of the Asian financial crisis in 1998; and the Burj Khalifa was originally going to be called the Burj Dubai but had its name changed to honour the ruler of the Abu Dhabi Emirate, who bailed Dubai out during the Global Recession in 2008, according to Business Week. The only tall building that does not ostensibly fit the mould is Taipei 101 – although it was rocked by an earthquake in 2002. Locally, the Carlton’s opening also coincided with the 1973 oil crisis; although the Michelangelo is technically not the tallest building in Johannesburg, it is the tallest in Sandton, which is the de facto new centre of the city – as the tallest building in the area, its opening in 2007 also coincided with the Global Recession in 2008; the construction of the Leonardo, also now the tallest in the unofficial heart of Johannesburg, has coincided with one of the weakest economies SA has seen in a while, with a shrink in GDP growth in the first two quarters of 2018, meaning the country is officially in recession. Despite the gloom around the economy, the Leonardo definitely pays homage to the rise and rise of Sandton as the economic capital of the continent. Reports indicate that the penthouse suite is valued at around R180 million, which will make it the most expensive piece of real estate in SA. By comparison, Transnet bought the Carlton from Anglo American back in 2000 for R33 million, though its replacement value is R1.5 billion. At one point the transport parastatal wanted to sell the building, but has now decided to revamp it. In the interim, staff are being temporarily housed at Waterfall City in Midrand. Johannesburg’s economic centrepoint has forever swung to the north. In the race to build ever-taller buildings, the latest will always fall victim to the next latest, and savvy cities will continue to use them as a positioning and marketing tool. After all, building tall buildings is what made New York iconic, so anyone who claims they cannot be a stupendous PR tool is not thinking big picture. On that note, credit has to be given to the true pioneers: the Empire State’s 40-year-reign as the tallest building in the modern world is unlikely to ever be repeated; the Carlton’s reign as the tallest building in Africa for a minimum of 45 years will never be repeated (though it pales into insignificance when compared to the building it surpassed as the tallest building in Africa, which held the record for over 4,500 years, with close to 4,000 of those being as the tallest building in the world – the Great Pyramid at Giza); and Sandton City will always go down in history as the first high-rise in Sandton that started it all. For that reason, perhaps the old gal in the heart of the once-mink-and-manure belt deserves a little credit. After all, Africa’s richest square mile is the perfect address to brag… Sources: The Heritage Portal (James Ball), Wikipedia, Judith Dupré, Skyscraper City, Andrew Lawrence, Business Tech, Council on Tall Buildings and Urban Habitat, The Star, Business Week |