Cash-strapped east “ghost” mall owners ordered to pay R500m to contractors
There is still no clarity when the mall will be completed or if it will ever be completed as owners of the mall continue to scrabble for funds to complete the mall.
The chances of completing the unfinished enormous “ghost mall” in Moreletapark in the east of Pretoria seemed unlikely as its cash-strapped owners were ordered to pay about R500-million to the construction company.
It has been 12 years since all construction of the Villa Mall at the corner of Delmas Road and De Villebois Mareuil Drive ceased.
The mall was due to be constructed as an upmarket retail centre and compete with the likes of Sandton City and Menlyn Park shopping centre, but is now simply an eyesore.
Last year, the construction company, namely GD Irons, took the owners of the mall, Thumos Properties (previously Capicol), to court to have them pay R249-million in outstanding fees with interest. The overall amount amounted to R500-million.
In the court papers, it was stated the mall’s owners were given R2.9-billion by an investment company in 2009 for the construction of the mall and a year later the funds dried up.
“In 2010, the project ran into funding issues and funding dried up. Although there were contractors on-site because there was an occupation deadline, there was no funding with which to complete the construction,” the court papers read.
The funding problems were attributed to “challenges” the mall owners had with the investment company, Brookfield Investments.
Since then, GD Irons tried to recoup outstanding amounts and previously launched an application for liquidation against the mall owners as an attempt to get the money but failed.
The Gauteng High Court in Pretoria recently delivered a judgment in their favour, ruling that the Thumos Properties should pay GD Irons about R500-million in outstanding fees.
This has raised concerns about affordability as the owners of the mall have had financial problems since 2010, which saw the mall remain unfinished.
The company was also placed under business rescue last year.
Pretoria-based business rescue practitioner George Nell has been leading the business and mulls over the judgment.
The GD Irons is not the only company that took the mall owners to court. Electrical company Quebec Electrical Contractors also went to court in 2013.
There is still no clarity on when the mall will be completed or if it will ever be completed as the owners of the mall continue to scrabble for funds to complete the mall.
About 300 shops were anticipated to be part of the mall and the halt in construction also saw the hopes of creating jobs in the retail industry in Pretoria vanish.
Previously speaking to Rekord, local ward councillor Daryl Johnston said over 70 properties were demolished to make way for the mall.
“The land across the mall belongs to the same developer. The idea was to create a spectacular shopping experience, which included a sky bridge over De Villebois Mareuil Drive.”
Johnston said the sight of the unfinished mall contributed to a negative perception of the city, as it was the first thing that visitors entering from the southeast saw.
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