Mega-malls still coining it
Regional centres outperforming smaller counterparts
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.