THABANG MOKOPANELE

Property Editor

LARGER regional and super regional shopping centres enjoy the longest dwell times and highest loyalty among shoppers, compared to smaller local centres, according to the latest research tracking key performance indicators at shopping centres.

South African Council of Shopping Centres data released on Friday showed that while small shopping centres enjoyed the highest frequency of visits by far, they were most at risk of heightened competition, shifting loyalties, and inconveniences such as high traffic volumes or road construction.

Regional shopping centres are dominant and have a wider retail offering — food, fashion and entertainment — and they target a bigger market, resulting in higher footfall.

Stanlib property analyst Keillen Ndlovu said regional centres generally had more national retailers as tenants and a lower component of line shops compared to smaller community and neighbourhood shopping centres.

“They sign longer leases. National tenants have countrywide coverage — when one store is battling it can easily be subsidised by another one. This is an attribute that line shops do not have — national tenants are less likely to default. So smaller shopping centres tend to have a higher level of tenant failure and higher vacancies,” Mr Ndlovu said.

Regional centres also had the lowest vacancies in retail space. There was still potential for new retail space in some non metropolitan areas.

But new retail developments in the listed space had come down sharply due to the economic slump and banks’ reluctance to fund more developments. Mr Ndlovu said Resilient Property Income Fund was the only listed firm with major retail developments, such as Mall of the North (Polokwane) and Brits Mall, which have had “exceptional letting progress”.

Lew Geffen Sotheby’s International Realty Commercial Investment Property MD Rodney Luntz said SA, especially Gauteng, was “overshopped”, with industry leaders wondering where tenants and consumers for new centres would come from.

“Care needs to be taken on future investment in retail property. Diligent research into changing consumer behaviour must be undertaken. Consumers have not yet recovered from the recession, and in many cases, (it) is the first to impact on the emerging market,” he said.

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Source: Business Day