Guest piece by Clur International
Trading density performance and growth at South African shopping centres in 2022 was its highest in four years, according to the Clur Shopping Centre Index.
The index is derived from The Clur Report, an asset management industry standard, tracking performance for listed and unlisted property funds at more than four million square metres of prime retail space in over 100 centres across SA and Namibia.
Despite the tough operating environment, the retail property heartbeat, backed by new leasing activity, looks strong, said Belinda Clur, managing director of Clur International which produces the index.
“Super-regional and regional shopping centres have maintained the highest trading density levels since mid-2018, when the Clur indices were introduced. Smaller centres show a consistent improvement. In 2022, super-regional centres showed the steepest climb in trading density levels,” she said.
The major centres grew year-on-year trading density by 13.6% to R41 103/m² in 2022, outperforming annual inflation by 6.7%. In particular, super-regional centres achieved trading density of R45 933/m², a 17.7 % increase and outperformance of CPI by more than 10%. For the Clur index for all centres the growth was 11.5% to R39 155/m², 4.6% better than CPI in 2022. Small regional and smaller centres grew trading density 6.9%, on par with inflation, to R35 057/m².
An improvement in retail property after the Covid-induced downturn, put forward by Clur in a presentation to the industry last year, continued in 2022, with a further growth surge in centre performance.
“Significantly, the trading density index for the combined November and December period for all centres was R52 841/m², an increase of 9%. The index for the rest of the year, that being January to October, was R36 372/m², an increase of 12.3%. This underscored a previously noted pattern of festive season business driving trading density levels with the rest of the year boosting growth levels,” said Clur.
“These results highlight the extent of consumer support for physical retail space and the important role the sector plays in supporting communities as well as the economy. They also show that agility in response to shifting consumer dynamics and tailored tenant mixes are helping drive the improvements in trading densities,” Clur said.
Clur says new leasing activity suggests a shift from a survival to more of a lifestyle oriented tenant mix as the Covid-19 related hard rules and their dire implications become a distant memory.
“There has been a distinct uptick and renewed confidence in apparel, with the segment taking up about a third of new lettings in terms of gross lettable area (GLA). Specific activity is seen in unisex wear, athleisure wear, shoes and men’s wear. Unisex wear outlet sizing shows a cautious approach, with stores smaller than 500m² currently being dominant, and are often smaller than 250m². Women’s wear stores show a conservative approach with most being below 250m², “ said Clur.
Food services also featured prominently, with a diverse spread of mostly fast casual dining formats and fast food stores taking up about 10% of the new lettings GLA. These were more or less equally represented in terms of store numbers, with a GLA weighting toward fast casual dining.
The index showed that an already strong technology sector continues to grow, with a number of smaller, but high-powered stores spanning cell phones, electronics and games. This sector typically yields one of the highest trading density and growth levels across categories.
“Banking, medical and convenience services play an ongoing important role, while the rest of the new lettings activity is peppered with accessories, jewellery, optometrists, sunglasses, books, stationery and some luggage stores,” said Clur.
alistair@propertyflash.co.za