Retailers taking up space again

Retailers are scrambling to take up space in new shopping centres and centres that are being expanded. In most cases the centres are fully let before opening their doors. However, the latest retail figures show consumers are less optimistic. Retail sales were disappointing in February dipping by 1,5% year-on-year (y/y), figures from Stats SA (SSA) showed.

Erwin Rode, property valuer and economist at Rode & Associates, says he is not convinced that the good times have arrived for shopping centres.

Households’ financial positions are still a source of concern and they are not able to spend on a large scale, despite the lower interest rates.

He says it has to be kept in mind that the run-up time of large retail projects takes a while and that it can take between three to five years to bring new space to the market. “To get the timing right is a stroke of luck.”

A new centre opening its doors on 29 April is the I’Langa Mall in Nelspruit, which is fully let. This regional shopping centre spanning 45,000sqm is owned by the Visagie Trust, Resilient Properties and the Lowveld Trust and was developed by MTB Development Company.

Luan Visagie of the Visagie Trust says the centre was developed after market research showed a need for such a mall in Nelspruit.

Shoppers in Nelspruit can look forward to the Game store and a wide range of retailers. It includes Pick n Pay, Woolworths, Edgars, the Mr Price Group, Truworths, Pep, Jet and Exact.

The Savannah Mall in Polokwane, which was the largest single development in Polokwane until 13 years ago, is currently undergoing extensive upgrades. It entails the existing space of 22,000sqm being expanded by an additional 15,000sqm through a significant investment of R350m.

This new space will be opening at the end of October.

The centre is owned by Pietersburg Property Development and let by Broll Retail.

Amongst the new retailers are Baby City, Toys R Us and DisChem, which is making its debut in Polokwane. The extension will also house some of the big national fashion retailers, such as Truworths Emporium and a bigger Foschini.

Economists expect retail sales to be weak during the rest of the year.

Dr Johan Botha, economist at Standard Bank, said in a report that although there are clear signs that the economy is improving, growth prospects for retail sales are still tepid.

He says a full recovery in retail sales will depend on the pace of households’ financial recovery.

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