Futuregrowth Asset Management is the country’s pioneering socially responsible investment fund. It does things differently — from shopping centres in townships and rural areas to making social impact a key investment criterion.
With 16 township and rural malls in eight provinces — and assets of almost R30-billion — the Cape Town-based company has proven non-traditional markets can score investment returns averaging 14%.
Over the past eight years, its Community Property Fund and Infrastructure Bond Fund also helped build roads, houses and the Inkosi Albert Luthuli Central hospital in the Eastern Cape. Says Futuregrowth Development Funds head Wayne van der Vent (40): ‘We are not ignoring the risks. We just measure and mitigate them differently.”
Why put township shopping centres on the investment radar?
It’s not only about shopping, but all the conveniences, whether it’s shopping, the post office, the bank … It is about improving the quality of people’s lives.
It started small with R60-million. That allowed us to get our toes into the water. It has been a difficult and hard slog to convince investors and retailers that it made sense.
What are the challenges?
[Retailers] need to create the stores to work for those markets without downgrading the brand image. With the opening of Tembisa Plaza [in October], the average spend in Shoprite was R71, but there were about 10 500 transactions. It’s only recently retailers have had this Damascus experience.
Your aim?
To turn township into suburbs, to create vibrant central business districts [CBDs] in these areas. When we went into Motherwell, [it] was houses. Now you have a shopping centre, next to [it] came a community clinic, the community sports centre and next to that the filling station. So you have a vibrant little economy. And hawkers are able to sell their goods because that’s where people are doing their shopping.
It makes the economy turn. At a centre like Tembisa, you have 300 to 400 people from the area getting jobs. You’ve got small businesses — we do 70% national tenants, 30% locals — able to take up premises.
Is that what it means to be a self-described new South African company?
For us, the new South Africa is not sitting together at the rugby … It’s about making people understand pre- and post-1994 is the changing of your life. The biggest threat to democracy is not terrorism, but poverty, if it is not dealt with.
How do you measure your social development impact?
We have a scorecard, but we like to measure it in terms of the centres performing well. If we were doing dismally on the social impact, I believe our centres would be doing dismally as well.
At Carletonville, [through] a trust fund we support projects in the area, like the Bake for Profit project … One woman went from no income to R4 000 profit a month. For me, that is as important as Tokyo Sexwale making his first billion.
And sometimes it comes down to loos?
At Carletonville, we asked around at the taxi rank: Would you pay to use the toilet? Yes, said the ladies, if it’s clean. My job is not as facilitator of toilet paper; there was a hawker woman selling apples charging no more than 50c, she clears R6 000 and has employed others. She now gives you a mint. There’s an empowerment story!
On the financial side there’s real reward for us. With R100 000 spent on [toilet] maintenance, if you multiply that by 16 shopping centres that’s R1,6-million. We are rolling this system out to all other centres …
Are you taking a new direction with the building of 1 500 middle-income homes alongside a retail centre in the proposed CBD of Khayelitsha?
Where does a person who can afford a R150 000 house go in Cape Town? You are earning too much to get a low-cost house and you are earning too little to buy elsewhere [yet] you don’t want to live in a shack in the backyard. We, together with Rand Merchant Bank, are starting to build early in the year. We hope to have the shopping centre open by Christmas 2005.
What’s next?
The model in Khayelitsha is one we’d like to roll out. It’s an integrated one: there’s housing, retail and commercial [space]. I think it’s what townships will need going forward. Those areas also need elements that are serviced through office space: attorneys, doctors, the insurances … municipal and government offices, all of these need to be much closer to people.