Counting The Cost Of Chaos

Commercial property owners weigh up the costs of damage from the recent riots and looting.

- Glenda Williams

Five days of devastation and the impact on the national GDP from looting and damage to South Africa’s shopping centres, malls, warehouses and infrastructure is estimated at R50bn, says the South African Property Owners Association (Sapoa).

Following the civil unrest that unfolded in KwaZulu-Natal (KZN) and Gauteng after former president Jacob Zuma’s arrest, about 200 shopping centres were looted and damaged, 100 malls were burnt down or suffered significant fire damage and around 3 000 stores looted.

The total impact of GDP loss in KZN alone is estimated at upwards of R20bn, reports Sapoa. Some R1.5bn was lost in stock, R15bn lost to property, over 50 000 informal traders have lost their livelihoods, approximately 1.5m people have lost their potential to earn an income and some 150 000 jobs are at risk.

In many cases, those malls in black townships were built to improve the lives of the communities, and those that are going to be most affected by the loss of income will be the very people the malls were set up to serve, Sapoa president-elect and CEO of Pareto Limited, Malose Kekana, said in a press briefing.

Izak Petersen, CEO of SA-focused real estate investment trust (Reit), Dipula Income Fund, tells finweek: “There is a fair amount of regret among the communities. They’ve realised how important these assets are in their lives and our sense is that they are unlikely to willingly be a participant in something like this going forward.”

Damage account