FEWER FEET, MORE MONEY Retail trading densities for South Africa’s largest shopping centres grew 10.2 percent in the fourth quarter of 2011, despite people making fewer visits to malls.
RETAIL trading densities for South Africa’s largest shopping centres increased by 10.2 percent in the last quarter of 2011, despite people making fewer visits to the malls, the Investment Property Databank (IPD) said yesterday.
The IPD, which measures commercial real estate performance, said larger shopping centres achieved the highest increase in trading density for the Christmas quarter.
The year-on-year increase in retail trading density for super regional centres, which include Sandton City, Eastgate, Westgate and Gateway, was an indication of growth in monthly revenue to R3 136.40 a square metre in the three months to December last year from R2 846.30 a square metre a year earlier.
According to the index, the 10.2 percent increase for the fourth quarter, contributed to a 4.9 increase for the full year.
“Despite a solid Christmas trading period though, annual trading density growth for the year remained below inflation across all shopping centre sizes, reflecting reduced levels of consumer confidence,” the IPD said. The index also revealed that South Africa’s Christmas shopping habits had changed compared with 2010.
In 2004 the annual growth rate across all mall types that comprise regional, small regional, community and neighbourhood shopping centres, was 11 percent. This growth rate steadily slowed until it reached just 0.4 percent in 2009.
In 2010, when South Africa hosted the World Cup, the retail trading density increased by 9.4 percent, but this fell back to 3.8 percent last year.
“This time around, people made fewer visits to shopping centres in the last three months of the year, but spent a lot of money while they were there,” the IPD said.
At super regional centres the number of visits a month fell by 5.9 percent in the fourth quarter. However, visitors spent 14.7 percent more during every visit.
The IPD also noted that shoppers found electronic gadgets and fancy jewellery more attractive.
“Jewellery stores reported high increases in sales across most types of shopping centres, whereas shoppers chose to make their electronics purchases in the larger centres.”
Despite the increase in trading density, the IPD also warned that as a result of falling turnover, tenants would be negatively affected and this would place pressure on margins. In some cases, tenants might not be able to continue operating and this could result in increased vacancies and lost rental revenue for shopping centre owners.
The IPD said trading densities were expected to remain under pressure in 2012 from forecasted constraints in household consumption expenditure. This, the group said, would include the rising operational costs, particularly from electricity and property rates. “This remains a crucial concern for all property tenants and shopping centre owners.”