CASH-STRAPPED consumers may well have curbed unnecessary spending but that doesn't mean all shopping centres are in the doldrums. There are still malls that continue to coin it, with retail-focused property fund Fountainhead's Kenilworth Centre in Cape Town's southern suburbs a case in point. According to Fountainhead's annual report for 2009, the Kenilworth Centre delivered retail sales growth of a whopping 28% for the year to 30 September. That compares to an overall drop of -5% in national retail sales in the first 10 months of 2009, according to Stats SA figures.
Other shopping centres in Fountainhead's R5,7bn retail portfolio that outperformed in terms of sales growth include The Boulders (Midrand), Blue Route Mall (Tokai, Cape Town) and N1 City Mall (Goodwood, Cape Town): all three notched up sales growth of 5% for the year to 30 September. Sales turnover was also in positive growth territory at Centurion Mall (75% share), Southgate Mall (near Soweto), Benmore Gardens (Sandton) and Bryanston Shopping Centre.
It appears management's strategy to revamp existing properties instead of pumping money into new acquisitions has paid off. Fountainhead MD Anton Raubenheimer notes in his overview that the R594,4m Kenilworth Centre - one of Fountainhead's top three properties in terms of value - recently underwent a major redevelopment at a cost of R122m.
The report shows vacancies throughout Fountainhead's shopping centre portfolio have remained steady at 6% over the past two years.
The fact that Fountainhead's retail portfolio appears to be recession proof hasn't gone unnoticed by investors. Stanlib Property Franchise, one of the biggest investors in listed property, recently singled out Fountainhead as one of the sector's best value plays for 2010.