Community shopping centres are here to stay
Neighbourhood and community retail centres effectively secured the national food distribution network during the height of the lockdown. It’s no surprise then that investors currently favour these “recession-resistant” properties.
According to High Street Auctions director and lead auctioneer Joff van Reenen, property investment indices emerging from the Covid pandemic have only served to underscore the intrinsic long-term performance of the neighbourhood and community retail shopping precinct asset class.
“Even before the pandemic, investor appetite for retail property on auction was largely impervious to broader negative economic sentiment. It’s a growing trend in recent years that’s kept pace with increased local consumer spending driven by the retail convenience factor,” he says.
“Even without the severe travel restrictions that forced communities to shop local, ‘new normal’ socialdistancing awareness of the need to avoid crowded spaces such as malls has already changed consumer habits. There’s absolutely no doubt that the trend of increased spending in smaller retail centres is here to stay.”
According to the 2020 Q1 Retail Trends Report issued by the SA Property Owners’ Association (SAPOA), the overall trading density in retail centres for March 2020 increased by 2.8% year-on-year.
PR
However, looking only at the headline figures in isolation can be deceiving. At an aggregate level, annualised trading density growth has been mainly driven by the smaller retail formats which have benefitted as shoppers favour convenience centres for an increasing proportion of their spend. Excluding community and neighbourhood centres, drops the overall growth to below 1%.
Annualised trading density growth by segment for March 2020, as measured by the MSCI South Africa Quarterly Retail Trading Density Index in the SAPOA report, shows that the greatest performer by far was neighbourhood retail at 14.9% followed by community
retail at 7.35%.
The small retail centres going under High Street’s virtual auction hammer next week include:
• The Karoo Junction Shopping Mall in Beaufort West. Tenants include OK Foods, Mr Price, Sheet Street, Total Sports and Pep
The Sanlam Retail Centre in Vryburg in the North West. Tenants include the Crazy Store, Total Sports and Rage
The Absa Centre in Gezina in Gauteng
A full-title supermarket and sports bar in Witbank, Mpumalanga
The Tsolo Retail Centre in Tsolo in the Eastern Cape. Tenants include Boxer Build, FNB, Beares and Pep.