October 14, 2003

By Vera von Lieres

Cape Town - In a hard-hitting speech, Marcel Joubert, the chairman of niche clothing group Platinum Holdings, warned yesterday that the country's major shopping centres had a "disease" which, if not tackled, would eliminate smaller tenants.

Addressing the Eighth African Congress of Shopping Centres, Joubert said acts of abuse were committed on a daily basis against "the smaller guys". He made a submission to the Competition Commission against the owners of shopping centres countrywide.

The key issue is the hugely monopolised concentration of shopping mall ownership, dominated by six to 10 regional shopping centre owners.

In the light of the theme of the conference, which was "rediscovering, revitalising and responding", Joubert said it was vital to talk about real problems facing the country's malls.

"We can't pull our punches ... We have to address these things."

He said there were structural impediments that, if not addressed, would be fatal to the survival of small retailers.

In the 1960s 200 000m2 of shopping centre space was available. Today, this had grown into 5 million square meters and had led to an excessively concentrated marketplace.  

At a regional level, shopping centre ownership was highly concentrated with too much power invested in a few landlords.

"It is a captive market, dominated by a few [landlords] and often that power is abused," according to Joubert.

About 50 percent of all shopping centre space in the country was occupied by just seven of the big food and clothing groups and, in many instances, there were iniquitous crossholdings between landlords and retailers, which were "killing the little guys in centres across the country".

A big problem was smaller tenants who ended up subsidising the rentals of the majors.

In the Western Cape, problems at Tygervalley shopping centre escalated two years ago, resulting in the start of strong tenant activism.

The SA Council of Retailers, representing the interests of the independent retailer, was set up.

Delivering the keynote conference address, Tazneem Essop, the Western Cape provincial minister for public works and property management, called for more investment in shopping centres in poorer communities. These needed to be revitalised, she said.