{"id":794839,"date":"2024-10-10T14:00:03","date_gmt":"2024-10-10T12:00:03","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=794839"},"modified":"2024-10-15T14:21:12","modified_gmt":"2024-10-15T12:21:12","slug":"two-of-the-largest-shopping-malls-in-south-africa-in-serious-trouble","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/property\/794839\/two-of-the-largest-shopping-malls-in-south-africa-in-serious-trouble\/","title":{"rendered":"Two of the largest shopping malls in South Africa in serious trouble"},"content":{"rendered":"\n

Two of the largest shopping malls in South Africa, Fourways Mall and Brooklyn Mall, have suffered significant declines in vacancy rates.<\/p>\n\n\n\n

Brooklyn Mall is 75% owned by Growthpoint Properties, the largest South African real estate investment trust (REIT) listed on the JSE.<\/p>\n\n\n\n

Growthpoint\u2019s results were disappointing. The REIT saw its net asset value per share decline by 6.1% to 2,020 cents per share.<\/p>\n\n\n\n

One of its worst performers was Brooklyn Mall, whose vacancy rate shot up from 3.6% in 2019 to 18.7% in 2024.<\/p>\n\n\n\n

Brooklyn Mall used to be a fantastic asset, which Growthpoint describes as the \u201cpremier shopping destination in Pretoria\u201d.<\/p>\n\n\n\n

It is perfectly positioned close to affluent suburbs with upmarket residential homes, corporate offices, and many embassies and diplomatic properties.<\/p>\n\n\n\n

The shopping mall has excellent restaurants, high-end clothing shops, national retailers, and quality home and d\u00e9cor shops.<\/p>\n\n\n\n

Brooklyn Mall is one of South Africa\u2019s largest shopping centres. It spans 75,259 square meters with a 5.2 million average annual footfall and 220 stores.<\/p>\n\n\n\n

On paper, Brooklyn Mall should be printing money. However, it lost its lustre recently and is now struggling to fill its stores.<\/p>\n\n\n\n

There are many reasons for this. One of them is that many homeless people started to beg inside the mall, which drove away its affluent clientele.<\/p>\n\n\n\n

The mall was slow to address the growing number of vagrants around and inside the shopping centre, which gave it a poor image.<\/p>\n\n\n\n

Alongside its vagrant problem, crime at Brooklyn Mall started to make headlines. This chased away many shops and shoppers.<\/p>\n\n\n\n

To add fuel to the fire, a few competing malls, notably the Castle Gate Shopping Centre, provided an attractive alternative to Brooklyn Mall.<\/p>\n\n\n\n

The result was that Brooklyn Mall\u2019s gross rental income per square meter and vacancy rates declined, reaching alarming levels in 2024.<\/p>\n\n\n\n

The charts below shows Brooklyn Mall\u2019s decline over the last five years.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

Fourways Mall decline<\/strong><\/h2>\n\n\n\n

South Africa\u2019s largest shopping centre, Fourways Mall, faces challenges similar to those faced by Brooklyn Mall, with declining rental income and increased vacancy rates.<\/p>\n\n\n\n

Fourways Mall, which is 50% owned by Accelerate Property Fund, was revamped and expanded in 2019.<\/p>\n\n\n\n

This project increased the shopping centre\u2019s gross lettable area (GLA) from 61,634 square meters to 178,202 square meters.<\/p>\n\n\n\n

The owners were upbeat about its prospects because of its excellent location and a great track record.<\/p>\n\n\n\n

However, it did not produce the expected results. The number of vacant shops became a headache for the owners, and the mall lost its lustre.<\/p>\n\n\n\n

Fourways Mall\u2019s vacancy rate increased from 3% in 2021 to 20% three years later, which is disastrous for any property owner.<\/p>\n\n\n\n

The net rent per square meter declined from R278 in 2019 to R223 in 2024, and rental income declined from R330 million to R295 million over the last year.<\/p>\n\n\n\n

The mall\u2019s fair value also took a significant hit. It declined from R9.6 billion in 2020 to R7.8 billion in 2024, a loss of R1.8 billion.<\/p>\n\n\n\n

Fourways Mall faced financial hardship, which saw all stakeholders launch a turnaround plan to revive the shopping centre.<\/p>\n\n\n\n

It partnered with Flanagan & Gerard as the strategic asset managers and Moolman Group as the property managers.<\/p>\n\n\n\n

The plan is to improve signage, introduce new tenants, deploy backup power solutions, improve security, optimise traffic flow, enlarge parking bays, and revitalise the surrounding area.<\/p>\n\n\n\n

The charts below show Fourways Mall\u2019s financial decline over the last few years.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n
\n\n\n\n

Read: New shopping mall launching in South Africa at the end of the month<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Two of the largest shopping malls in South Africa, Fourways Mall and Brooklyn Mall, have suffered significant declines in vacancy rates.<\/p>\n","protected":false},"author":10,"featured_media":794846,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12755],"tags":[19940,20524,19746,6198],"class_list":["post-794839","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property","tag-accelerate-property-fund","tag-brooklyn-mall","tag-fourways-mall","tag-growthpoint-properties"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/794839","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=794839"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/794839\/revisions"}],"predecessor-version":[{"id":795612,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/794839\/revisions\/795612"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/794846"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=794839"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=794839"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=794839"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}