Shopping malls suffer

Johannesburg - Community shopping centres have suffered the most in a trading environment where real retail sales have fallen 5% in the year to September 2008, the biggest decline since September 1998.

Trading density at these centres, which range from 12 000 sq m to 30 000 sq m, has declined on an annual basis by 18.8% to R14 266/sq m in the past 12 months, according to the latest retail property report from the South African Property Owners Association (SAPOA).

Trading density comprises turnover divided by floor space, or sales per sq m.

In the year to September only large and small regional shopping centres achieved annualised positive growth of 0.1% and 2.4% respectively in trading density. This brought their trading densities in September to R18 763/sq m and R20 273/sq m respectively. Trading density growth for super-regional malls fell by 0.3% to R26 944/sq m on an annual basis.

Anton de Goede, property portfolio manager at Coronation Fund Managers, says larger shopping centres are more defensive in a difficult trading environment because of the greater percentage of national tenants, who can comprise 70% to 80% of the occupants.

In contrast, smaller community centres usually have one or two food anchors, as well as various convenience stores and smaller tenants struggling in a challenging trading environment.

Super-regional shopping centres still have the highest monthly rentals per sq m, averaging R188/sq m in September, followed by larger regional centres at R118/sq m, and R95/sq m for smaller regional centres.

Furniture dealers, especially, have been under pressure in the past year and their trading density has declined by 37% since March 2006.

Interestingly enough, men's clothing stores' trading density is down by 0.5% in the 12 months to September, while women's have come off by 20%. He says men's clothing stores are more stable because they are less seasonal than women's.

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