Property Reporter

PERISCOPIC Property Management, which manages the retail and retail financial component of Montecasino, is upbeat about the burgeoning neighbourhood shopping centre market .

Mark Souris, a former Old Mutual Properties retail executive , who joined Periscopic this month , said earlier this week neighbourhood shopping centre owners were becoming a big market for property managers.

Souris estimated that the market for the management of these centres was worth about R5bn.

Their number had grown significantly in the past five years, as urban density and congestion turned shopping patterns in favour of smaller centres, he said.

This bodes well for property managers looking to grow business .

"A substantial portion of these community shopping centres are owned by private individuals yet all the major property managers concentrate on building clients among listed funds or major institutions," said Souris.

Retailers were fighting to increase their market share and were turning to smaller communities to do so, Souris said.

Colin Young, fund manager of Old Mutual's South African-listed property funds, said last week that he expected a shortage of community and neighbourhood shopping centres in the next 12 months.

Already a number of listed property funds with large exposures to retail property are expanding their shopping centres as demand for extra space from national retailers surges on the back of the retail boom.

Business Day reported last week that listed property funds were also keen to get their hands on the new retail developments as they come to market.

However, a lot of the private property owners are unwilling to sell them because they know values will grow in the short term.
This makes it more difficult for listed property funds to acquire new retail properties.

Souris said that the mushrooming neighbourhood shopping centres are coming on to the market fully let.

Sep 09 2004 07:28:11:000AM Nick Wilson Business Day 1st Edition