Share

Footfalls the lifebood of centres

Johannesburg – Retail centres targeting lower income groups are the star performers in listed property portfolios.

These centres in townships, rural districts and city centres outperform their more fashionable suburban peers.

This is a red hot sector and property groups already owning such assets are planning to expand them at the insistence of retailers. There is also intense competition among developers to stake their claims in these areas.

The good performance of the centres is largely driven by government subsidies and large visitor numbers, because most are linked to a taxi rank.

Listed property fund Vukile’s chief executive Laurence Rapp said the company wants to expand in both rural and urban markets, and will enlarge its centres in townships.

Vukile’s retail centres, which target the lower LSM groups, achieve a better trading density (turnover per square metre) and stronger growth in visitor numbers per month than most suburban centres. The trading density of national retailers in these centres also appears to be higher.

The company’s Daveyton Mall, covering 17 095m² in the Daveyton township on the East Rand, attracts some 920 000 visitors a month – a considerable number for a centre of that size. Women between the ages of 23 and 35 comprise 65% of the centre’s visitors.

Keillen Ndlovu, head of Stanlib’s property funds, said that although per capita spending is less than in suburban areas, turnover is tremendously boosted by large visitor numbers.

The centre, which targets LSM income groups 3 to 5, has an annual trading density of R28 000/m², said Kobus Ferreira, Vukile’s retail asset manager. This represents annual growth of 9%.

The trading density of suburban centres is between R20 000/m² and R30 000/m² per year. He said the trading density of national food chains in Daveyton Mall represents R55 000/m²/year, while clothing stores achieve a density of up to R59 000/m²/year.

Vukile plans to enlarge the centre by at least 9 000m² and is waiting for the city council to consider the application.

Vukile’s 23 177m² Dobsonville centre in Soweto, which serves LSM income groups 4 to 6, attracts 958 000 visitors a month and has a trading density of R27 900/m²/year. This represents annual growth of 12%.

Ferreira said the centre has been minimally affected by the advent of the Jabulani and Maponya malls in Soweto.

The centres of a newcomer to the exchange, Rebosis, which serves the lower LSM groups, are doing well, with an exceptionally high number of monthly visitors. These centres include the 36 500m² Mdantsane City in the East London’s Mdantsane township and the 26 500m² Blood Street Mall in the Pretoria CBD, which is close to a busy taxi rank.

Renosis chief operating officer Mike Rodel said both centres have a high percentage of national tenants with a good mix of local retailers.

Mdantsane attracts a monthly average of 650 000 visitors.

He said that although the average spend per basket is less than in regional shopping centres, both have an average trading density of close to R20 000/m²/year. This compares well with bigger suburban shopping centres.

The Fortress Property Fund is also reaping the rewards of its strategy of investing in retail properties that focus on the lower LSM groups. This fund’s retail assets in rural areas, with a focus on commuters, have enabled double-digit distribution growth in the six months to end-December.

In the period under review Fortress declared a combined distribution of 62.65c, representing 10.22% growth, compared with 58.84c for the previous corresponding period.
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.97
-0.4%
Rand - Pound
23.97
-0.3%
Rand - Euro
20.52
-0.2%
Rand - Aus dollar
12.35
-0.0%
Rand - Yen
0.13
-0.4%
Platinum
900.15
+0.4%
Palladium
1,000.00
-0.2%
Gold
2,213.87
+0.9%
Silver
24.75
+0.4%
Brent Crude
86.09
-0.2%
Top 40
68,237
+0.8%
All Share
74,414
+0.7%
Resource 10
57,122
+2.6%
Industrial 25
103,714
+0.4%
Financial 15
16,494
-0.2%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders