According to the latest data from MSCI, this category came in at 8.3% higher, year-on-year (y/y), in terms of trading density growth.  Second-ranked regional shopping centres grew density 7.2% and the neighbourhood category, the slowest, 2.2%, according to the IPD South Africa Retail Trading Density Index. Trading density is calculated as turnover over the space used to generate that and thus does not include the impact of vacancy. 

In 2014 it was super regional malls that recorded the highest growth after advancing 10.2% y/y (before losing some ground this year), while community shopping centres recorded a muted 3.6% rise y/y before almost doubling this to come in third behind regional shopping centres as at September 2015.

MSCI Executive Director Stan Garrun isn’t quite excited by these trends. He feels that South Africa is somewhat “over-shopped” in the urban areas and larger centres.

“This is most evident in trading density growth lagging rental growth – that’s more space with just so much disposable income chasing it. Published retail sales show continual decline. Food retail is moving into smaller quality centres but the clothing brands and traditional dept stores are going into all the larger regional property types in multiple locations and undoubtedly a degree of ‘cannibalisation’ is taking place,” he writes to eProperty News.

At last count, at the end of the third quarter, the IPD Retail Performance Benchmarking Service contributors covered a gross lettable area of 4-million square metres that in turn spanned 94 properties across South Africa. That marks a slight decline from the 4.2-million square metres and 95 properties recorded in 2014. With the exception of regional malls, where a net growth of one property was recorded, other categories experienced significant falls.

Of this, at almost 1.8-million square metres and 27 sites, regional malls boast the largest trading space, while small regional malls (with the similar number of properties after falling from last year’s 29) lie a distant second with slightly more than 1-million square metres in gross lettable area

A look at trading density by tenant category shows that apparel at super regional malls has declined markedly since 2014, and has been relegated to second place or R3,612/m²/month. Apparel includes menswear, womenswear, children’s wear and accessories.

While food has also taken a knock, it pushed ahead, past apparel (at super regional malls), to command the highest number as data from community shopping centres show.

This tenant category – made up of grocery/supermarkets, food speciality, sweets and bottle stores but excludes restaurant and takeaway stores (or food services) – comes in at R4,225/m²/month, while the lowest is home décor category at neighbourhood malls, where the comparable figure is a low R1,213/m²/month. Home décor spans art, antiques and home furnishings. The figure rises incrementally per property type to touch R2,541/m²/month (significantly lower than last year’s R3,153/m²/month) at super regional malls.

Garrun observers that retail has regained its leading position as best performing property sector year-to-date. He cites inflation-beating growth in both rentals and trading densities. “A word of caution though is that we go into the Christmas season with lower economic momentum that has been predicted and more belt tightening required by consumers to make it through the holiday season in the black.”