Shopping malls aimed at the lower Living Standards Measure
(LSM) groups are the star performers in listed property portfolios.
The performances of these shopping centres in townships,
rural areas and CBDs overshadow the performances of their suburban
counterparts. That makes this a red-hot sector to be active in, and property
groups that already have some of these properties are planning to enlarge them.
There is also intense competition among developers to peg
off a claim for themselves in these areas.
The good performances of these centres are largely driven by
government grants and large numbers of visitors – most connected to taxi ranks.
Listed property fund Vukile chief executive Laurence Rapp
says the company plans to expand in rural and urban markets, and will expand
some of its township malls. Vukile’s malls aimed at the lower LSM groups are
achieving better trading densities (turnover per square metre) and stronger
growth in the number of monthly visitors than most urban malls. The trading
densities of the national retailers in the centres also seems to be higher.
The company’s 17 095 m² Daveyton Mall in the Daveyton
township on the East Rand attracts about 920 000 visitors a month, which is a
lot for a centre of this size. A total of 65% of the visitors are women between
the ages of 23 and 35.
Keillen Ndlovu, head of Stanlib’s property funds, says that
though per capita spending is lower than in the suburbs, the turnover is
tremendously boosted by the large numbers.
This centre, which is aimed at the LSM3-5 income groups, has
a yearly trading density of R28 000/m², says Vukile’s retail asset manager,
Kobus Ferreira.
This represents a yearly growth of 9%. The trading density
of normal suburban malls is between R20 000/m² and R30 000/m² a year. He says
the trading density of national food chains in the centre runs at R55 000/m² a
year, while retail shops achieve a density of as much as R59 000/m² a year.
Vukile has plans to expand the centre by at least 9 000 m²
and is waiting for the city council to approve the application.
Vukile’s 23 177 m² Dobsonville mall, which serves the LSM4-6
income groups, attracts 958 000 visitors a month and has a trading density of
R27 900/m² a year. This represents a yearly growth of 12%. Ferreira says the
centre is not at all affected by the opening of the Jabulani and Maponya Malls.
A newcomer on the stock exchange, Rebosis, has centres that
serve the lower LSM groups. It is faring well and is chalking up exceptionally
high numbers of monthly visitors.
Some of its malls include the 36 500m² Mdantsane City in
East London and the 26 500m² Bloed Street Mall in Pretoria’s CBD near a busy
taxi rank.
Rebosis chief operating officer Mike Rodel says both centres
have a high percentage of national tenants, with a good mix of local retailers.
Mdantsane attracts an average of 650 000 visitors a month.
He says that though the average spending per basket is lower than in the
regional malls, both have an average trading density close to R20 000/m² a
year.
This compares well to that of the larger suburban malls.
The Fortress property fund is also reaping the benefit of
its strategy of focusing on the lower LSM groups.
The fund’s retail assets in rural areas – aimed at commuters
– achieved double-digit distribution growth in the six months to December.
In the survey period, Fortress declared a combined
distribution of 62,65c, which represents 10.22% growth, versus 58.84c in the
previous corresponding period.
- City Press