Shoppers are returning to South Africa’s big malls

Liberty Two Degrees (L2D), the precinct focused retail-centred REIT, says that the easing of lockdown restrictions and the move towards a post-pandemic operating environment is encouraging as retailers and consumers gain confidence.

The group on Wednesday (25 May), pointed to increased customer visits to its malls – portfolio foot count for April 2022 was 14.6% up on April 2019, led by Sandton City, which it said continues to outperform the market, exceeding precovid turnover levels at 29.4% ahead of Q1 2019.

Additional centres in its portfolio include Nelson Mandela Square, Eastgate Shopping Mall, Liberty Midlands Mall, and Botshabelo Mall.

Retail occupancies remain strong at 97.3% ahead of the industry benchmark, it said.

“As we navigate the uncertainties of global proportions that impact our domestic economy and business, we remain committed to the goals we have set in future-proofing our business. We continue to drive value and positive recovery in all that we do. As we rebuild for sustainable growth, the role of leadership to drive positive outcomes has become increasingly important in this disruptive environment,” said Amelia Beattie, chief executive of L2D.

Beattie said that the turnover for the first three months of 2022 is higher than the corresponding months over the past three years, and if the annual turnover up to March 2022 is considered, the portfolio is 2.1% ahead of the 12 months leading up to the onset of the lockdown (April 2019 – March 2020).

L2D said the evolving retail landscape provides opportunities to adapt and grow. “Our malls continue to evolve and operate as iconic spaces, with Sandton City attracting almost 17 million customers over the year in 2021 and has already seen 6.9 million customers visit the mall in 2022 up to April,” said Beattie.

John Loos, property sector strategist at FNB Commercial Property Finance, said in a recent note that super-regional centres look to be closing the performance gap between themselves and the smaller community and neighbourhood centres. Covid saw a shift in shopping patterns from the large to smaller strip malls as consumers opted to shop closer to where they live.

And data from the South African Property Owners Association (SAPOA) indicates that shoppers visit malls less often but spend more money per visit.

“The good news appears to be that Covid-19 has receded as a risk in South Africa, and restaurants and entertainment areas of retail have been partially on the mend. This can greatly improve the fortunes of those larger “experience” shopping centres that are heavier on non-essential spend and entertainment, and perhaps this is what we are already seeing in the super regional category, if not as much in the smaller regional categories,” said Loos.

Brick and mortar will continue to compete against growing online sales.

Attacq, the real estate investment trust and operator of Waterfall City including the Mall of Africa, noted in March that its retail-experience hubs performed relatively well over the past twelve months, reporting a 96.2% occupancy rate. In addition, year-on-year weighted average trading density grew by 8.7%, with the Mall of Africa increasing by 14.9%, it said.

“Trends such as online shopping, work-from-home and hybrid working models have really pushed us as a team to think differently about how we interact within the real estate sector, particularly in our developments and how we service clients in these safe, connected spaces,” said CEO of Attacq, Jackie van Niekerk.

“Our diversified client base and extensive portfolio of different asset classes in multiple geographies, as well as our streamlined approach to asset, property and development management, have provided us with a strong foundation of the building blocks for continued business resilience.”

Read: The shopping malls where you’ll soon be able get your Smart ID or passport in South Africa

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