DESPITE the negative effects of the global financial crisis experienced by consumers, confidence in the retail sector remains positive.

Johan Engelbrecht, retail management director for JHI — a major property services company managing about R40bn in assets in Africa — says the company is seeing a total capital investment of more than R500m in expansion projects in shopping centres under its management.

Among others, these include the extension of the Kolonnade Retail Park in Montana, Pretoria, with the introduction of a new Virgin Active gym.

There is also a planned extension to accommodate a major anchor tenant in Greenstone shopping centre, on the corner of Modderfontein Rd and Van Riebeeck Ave, near Edenvale.

Plans are also afoot to increase the size of national retailers — such as Truworths, Foschini and Checkers stores — in the Kolonnade centre.

Engelbrecht says that though the recent festive season revealed a marginal increase in foot count and a reduction in discretionary spend on luxury goods, value retailers weathered the storm better than most.

He says fast-food turnover was up, as well as clothing, textiles and shoes, and supermarkets achieved a fair performance over the previous year.

“Interestingly, at the Boardwalk shopping centre in Richards Bay, while foot count was down, spend per capita increased. This centre also saw an increase in fast-food sales over the festive season.”

Engelbrecht says along with concern about Eskom’s announced tariff hikes, a key focus is on utilities management, in order to contain costs wherever possible.

“We are applying diligent processes and controls in order to curb costs. The hotly debated Eskom tariff increases are a major concern for landlords and tenants alike, (and) the latter may be compelled to close their doors due to increased operating costs.

“As a result, it is imperative for landlords to look at implementing measures to increase their cost- effectiveness.”

On a positive note, he says the company is investigating the possible introduction of solar-powered advertising boards as well as solar-powered lighting in some of the major centres that it manages.

“We are also endeavouring to introduce the more energy-efficient LED lighting throughout our centres, as well as water-saving measures and the greening of tenant installations.”

Another trend the company has noticed is that shopping centre managers are paying increasing attention to improving security measures.

Source: Business Day