Big changes for shopping malls in South Africa

 ·13 Nov 2023

The Broll property group says that shopping malls in South Africa are changing tack, with small and medium-size retail centres on the rise and stores themselves looking at new ways to keep shoppers interested.

The South African retail landscape has been hit with several high-profile and large shopping malls going under the hammer or changing owners in recent months, giving rise to the impression that retail centres are not captivating shoppers like they used to.

According to Broll, while retail foot traffic and trade may not be at the same levels seen pre-pandemic, the sector is still going strong and is evolving with the times.

“While malls may be changing hands, those being sold within the property industry are undergoing revamps to meet evolving shopper needs,” it said.

“Our shopping centres may not be trading at the same levels they were prior to the pandemic, but they are still trading – and trading well.”

The group noted that online shopping is increasing in South Africa, and the rise of making online purchases for necessities is a disruptor to the retail centre sector. But even in this context, online still accounts for less than 5% of total sales – and this figure is itself a 40% increase from before Covid.

What is true is that there has been a decline in the construction of “mega malls”, Broll said – but the number of mid-size malls – between 20,000 and 30,000 square metres – is on the rise.

Another shift being seen is that older centres are being revamped and refurbished – and this is taking place across all provinces, it said.

South Africans continue to enjoy visiting centres for the experience of eating out or shopping, particularly fashion items. There has also been a notable rise in the number of retail centres being built in rural or remote areas.

“Many people who live in outlying and rural areas look to community shopping centres to get unique experiences. In this respect, landlords are creating a greater number of ‘experiences’ for their visitors, increasing the number of activations and other activities aimed at enticing and entertaining visitors to malls,” Broll said.

Feeding into this, the group said there has also been a move by retailers themselves towards more “immersive and interactive shopping”, in line with trends in Japan and Singapore.

“Although in its early stages in South Africa, shopfronts are starting to include movement to showcase products and attract customers.

“Malls are also increasing the number of interactive and pause areas – incorporating lifestyle-centric furniture and accessories – in common spaces to allow for reading, relaxation and dining.

“Some are converting roof space with artificial grass, lounges and umbrellas to invite people to take a break or have lunch. These efforts are aimed at making consumers feel safe, relaxed and able to spend more time in the centres,” Broll said.

Challenges

Despite shopping malls still being an active part of South Africa’s retail landscape, the property group noted that challenges like load shedding and social unrest have stifled much of the country’s potential.

“Load shedding and riots have increased pressure on South African landlords’ bottom lines. They have been compelled to invest in sustainability and security measures to ensure their centres are more secure and continue to trade during power outages,” the group said.

Another challenge is vacancies.

However, with the recent agreements by large retailers like Shoprite, Spar and Pick n Pay to end long-term exclusivity deals, this presents opportunities for new local players to enter the market, it said.

“There is no doubt that shopping malls are here to stay for the foreseeable future,” the group said.


Read: This is the busiest mall in South Africa – situated in the country’s shopping capital

Show comments
Subscribe to our daily newsletter