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Liberty Two Degrees (L2D), which owns some of South Africa’s biggest malls, released a trading update on Friday, which showed that Sandton City continues to see strong trading growth despite the weak state of the economy.
Trade density (which measures sales per rentable square metre in a mall) grew by 7.9% in Sandton City in the year to end-June, while Nelson Mandela Square, which directly adjoins Sandton City, saw growth of 6.5%. Its Botshabelo Mall saw growth of more than 11%.
But trade density in Eastgate fell by more than percent.
While Sandton City’s vacancy rate remains low at 0.6%, L2D’s overall vacancy rate is 4.6% of gross leasable area, with retail (2.3%) having a much lower vacancy rate than offices (9.8%).
Earlier this week, its competitor Growthpoint reported an overall vacancy rate of 6.8%.
Edcon represents 8.2% of L2D’s total retail space, but that percentage still includes 5,600 square metres which has been returned to Eastgate. Edcon wil pay rent on the space until the end of the year. Woolworths now represents 9.2% of L2D’s total retail space, followed by The Foschini Group (5.5%), Shoprite Checkers (5.3%) and Massmart (3.8%)
The company says South African retail environment remains on a slow recovery path and that online retail (a threat to malls all over the world) has grown in appeal in South Africa, albeit not at the same pace as experienced in developed markets.
