Mega-malls still coin­ing it

Re­gional cen­tres out­per­form­ing smaller coun­ter­parts

Finweek English Edition - - Property - JOAN MULLER

CON­SUMERS MAY WELL have cut back on spending, with lat­est Stats SA fig­ures show­ing a 4,6% fall in re­tail sales in July (y-o-y). But the lat­est re­tail prop­erty trends re­port from SAPOA and IPD’s Re­tail Per­for­mance Bench­mark Ser­vice con­firms that su­per re­gional malls ex­ceed­ing 100 000sq m con­tinue to spin good prof­its for re­tail­ers and shop­ping cen­tre own­ers.

Su­per re­gional cen­tres are fetch­ing far higher trad­ing den­si­ties (turnover di­vided by gross let­table area) than their smaller coun­ter­parts at an av­er­age R28 367/sq m for the 12 months to end-March 2008.

That was fol­lowed by re­gional malls (50 000sq m to 100 000sq m) at R19 096/sq m, small re­gion­als (25 000sq m to 50 000sq m) at R19 434/sq m and com­mu­nity cen­tres (12 000sq m to 25 000sq m) at R14 349/sq m.

Big­ger cen­tres also typ­i­cally com­mand higher rentals than smaller malls.

How­ever, it ap­pears that com­mu­nity cen­tres are start­ing to play catch-up with the big­ger malls in terms of turnover and rental growth. (See graph)

The re­port notes that al­though over­all trad­ing den­si­ties in all types of cen­tres are still ris­ing, cer­tain mer­chan­dise cat­e­gories are re­port­ing a drop in sales as higher in­ter­est rates are forc­ing con­sumers to cut back on non-es­sen­tial spending.

Travel agen­cies have been hard­est hit, with an av­er­age drop in turnover of R173/ sq m re­ported for ev­ery 1% rise in in­ter­est rates.

Other types of re­tail cat­e­gories that have ex­pe­ri­enced slower sales on the back of ris­ing in­ter­est rates in­clude food stores (-R51/sq m), cloth­ing stores (-R40/sq m), home fur­nish­ing stores (-R24/sq m) and jew­ellery stores (-R21/sq m).

In­ter­est­ingly, while av­er­age turnover in all shop­ping cen­tres is up, foot­fall is down. That im­plies there’s been a sig­nif­i­cant in­crease in per capita spend, sug­gest­ing per­haps that shop­pers are mak­ing fewer trips to malls but spending more at each visit.

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