New mix works for Mall of Africa
You could be forgiven for mistaking Mall of Africa as just a carbon copy of the older Sandton City mall about 13km down the road, given their similar tenant mix and luxury store offerings.
When the mall was launched two years ago, the fear was that it was opening in a saturated market, with South Africa ranking at number six in terms of the number of shopping malls in the world at the time — behind only the US, Japan, Canada, the UK, and China. Further muddying its prospects was the slowdown in the retail sector, which has remained under pressure for the past few years.
Yet against the odds, the Attacq-owned mall has managed to rake up 11% year-onyear growth in turnover.
It is growth that has not come without teething issues, though.
Michael Clampett, Attacq’s head of asset and property management for retail, told Business Times at the group’s celebration this week that in the past two years it has had to update its tenant mix, letting a few international brands go.
“We did most of the clean-up last year , so we had 18 reconfigurations and relocations and on the same footprint we increased turnover by 240%,” he said.
With management having completed the major work in addressing consumer needs and correcting the tenant mix, Clampett said he did not anticipate having to do as many reconfigurations in the future.
Last year, the closure of international brands — such as a flagship Mango store, River Island and French retailer The Kooples — left many questioning the success of Mall of Africa with its hefty R3.5-billion investment.
Johann Fourie, the general manager at Mall of Africa, said one of the lessons learnt involved brands that were a first for South Africa “but were not well-known — and we had to go back and think about the tenant mix”. The space once occupied by the Mango store now houses three stores — a bookshop, a Contempo flagship store and a Refinery clothing store.
“As we take boxes [stores] back, we try and resize them and make them smaller,” said Fourie.
Upping local game
There are still some missing links.
“The number one asked-for brand is Mugg & Bean, so the first opportunity that I get, it’s a no-brainer, it has to go to a Mugg & Bean,” Fourie said.
If enough space opened up, Exclusive Books would also be introduced to the mall, he said.
“But we are 99.6% let . . . and moving forward the focus will be on services such as postal services, including a PostNet store.”
Since the closure of the other brands, 16 new stores have come to the mall, including Superdry, Hurley and Ramsey, Emporio Armani and Tommy Hilfiger.
Along with lessons from the store closures, Attacq has become more aware of the burden placed by long-lease terms.
“Our standard lease terms are three to five years on the smaller stores. Our big nationals are 10 years, and you need to be fluid to make sure that as trends change, people’s spending patterns change,” said Clampett.
Clampett said while local retailers may have their unique challenges, in general they have also had to adapt to the tenant environment in the mall.
Truworths, for example, “has become much better in the past two years because of the competition”.
Mall of Africa “will never opt out of a national lease like that because they [local retailers] are big enough to also change and stay with whatever is relevant to today. But in our minds, we don’t do a lease longer than five years,” he said.
The smaller kiosks are given one-year leases, said Fourie. “We want to keep that flexibility if we want to refresh [but] we also need to be flexible.”
The opening of PwC and Deloitte offices in the precinct is expected to bring greater foot traffic.