September 9 2024 17:20
SOUTH AFRICA
Trading densities at community and smaller shopping centres were welcomed in the second quarter of 2024 and a bright spot for retailers across the country. They ran counter to a contraction in the overall performance of retail property and supported the theme of community and global wellness.
This is according to the Clur Shopping Centre Index, part of the broader Clur Collective asset management support platform which helps listed and unlisted property funds to understand asset health and optimise returns at more than 4.1-million square metres of prime retail space and 140 merchandising categories across SA and Namibia. This coverage will soon increase to more than 5.4-million square metres.
“With the emerging importance of the move to make the world well, community focused retail, as a new frontier, is a critical consideration for shopping centre strategy. This community spirit is signalling the need for social impact retail,” said Belinda Clur, managing director of Clur International, which produces the index.
The Clur Index for All Centres for the second quarter closed at an annualised trading density of R41,343 per square metre and year-on-year percentage growth of 3.6%.
This represented a further contraction of -0.9% relative to quarter one 2024 and -1.5% relative to the 2023 calendar year. This growth also under-performed June 2024’s consumer price inflation index by -1.5%.
“Highest trading densities were shown by the two size extremes of super-regional centres, at R49,177 per square metre and community and smaller centres at R42,497 per square metre. The highest year-on-year was shown by super regional and regional centres, both at 3.9%,” said Clur.
While community and smaller centres showed the lowest growth rate of the pack at 1.7% in the second quarter of 2024, they were also the only segment to show an expansion in growth relative to the first quarter, of 0.1%. By contrast, super-regional centres showed the greatest contraction of -1.5% relative to the first quarter, with the All Centres index contracting by -0.9% for the same period.
The quarter two 2024 provincial indices for the Western Cape, Gauteng and KwaZulu Natal again saw the Western Cape as the top performer, with a trading density of R45,638 per square metre and year-on-year percentage growth of 5.8%. It was the only index to outperform June 2024’s CPI by, 0.7%.
KwaZulu Natal (KZN) showed the next highest trading density of R42,417 per square metre, and is the only index to show negative year-on-year growth of -2.2%. However, it is the only province to show a growth expansion relative to quarter one of 2024 of 0.4%. Gauteng had the lowest trading density of the three provinces, at R40,632 per square metre and the second highest year-on-year growth rate of 4.9%.
Clur said a split-year comparison of growth rates, considering only quarter two against the remaining nine months of the rolling 12 month period, showed the nine-month trading density is higher across all segments, likely because of the festive season falling within this period.
“However, while the year-on-year percentage growth is also higher in most instances, community and smaller centres and the KZN province are counter this trend, showing higher growth rates for the three months of quarter two versus the prior nine-month period,” said Clur.
“This counter-trend boost for these segments in the last quarter suggests that even better prospects are emerging there,” she said.
Clur said there was a return to important basics, “with a focus on what really counts and what is needed to make the world well”.
“This started as a focus on personal wellness, seen in demand for athleisure, fitness, health and considered beauty categories. This has now evolved into a broader community and global wellness theme,” she said.
“Tied to this is a general shift in values characterised by a focus on quality of life and experience, dignity from a human, animal, tech and planet perspective, balance and time being viewed as a currency more valuable than money,” she said.
“Social impact retail, as a new frontier of retail in SA, effectively takes retail to where it needs to be, to better service communities and to boost economic opportunities within their localities. In these instances, by bringing retail to the doorsteps of hard-pressed consumers, transport costs are alleviated, increasing available spend for essential groceries and other products, thereby uplifting community living standards and economies,” said Clur.
alistair@propertyflash.co.za
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