SA’s malls are set to enjoy fair trade this festive season... and a bright future
This holiday season is likely to ring in fair festive retail sales despite 2016’s frail and fickle economy. In fact, this December’s retail trade could well be an improvement on last year.
This is the word from Paul Gerard of Flanagan & Gerard Property Development & Investment, the leading shopping centre developer and retail leasing specialists.
“Even with the current political volatility, macroeconomic indicators favour the festive trading season in 2016,” says Gerard.
His careful optimism is driven by the performance of retailers in Flanagan & Gerard’s shopping centre portfolio, which show better growth than figures published for the industry.
Established in 2001, Flanagan and Gerard has been involved in developing many dominant regional shopping centres and high-end niche community centres across South Africa, working with various joint-venture partners. Noted retail developments under its belt include Vaal Mall, Paarl Mall, Mall of the North, Middelburg Mall, Highveld Mall, Heidelberg Mall, Eyethu Orange Farm Mall, Morningside Shopping Centre and Nicolway Bryanston, among others.
It also has an impressive trio of exciting new retail property developments set to open shortly.
The world-class Springs Mall at Blue Crane Eco Park in Ekurhuleni, on Gauteng’s East Rand, opens on 16 March 2017. At 48,000sqm it will be the only major mall in its region. It
is a joint venture between Flanagan & Gerard, Blue Crane Eco Mall (Pty) Ltd, JSE-listed retail focused SA REIT Vukile Property Fund and Murinda Investments, which is part of the Giuricich Bros Group.
The spectacular 80,000sqm Ballito Junction Regional Mall redevelopment on KwaZulu-Natal’s Dolphin Coast will open on 23 March 2017 with 200-plus shops. It is owned and developed by Flanagan & Gerard with Menlyn Maine Investment Holdings.
The highly anticipated 50,000sqm regional Thavhani Mall at Thavhani City in Thohoyandou, Limpopo, opens on 24 August 2017. Flanagan & Gerard is developer and shareholder in Thavhani Property Investments, responsible for the leasing and development of the mall. Vukile Property Fund has also secured a one-third stake in this mall, which will transfer on its completion.
Gerard notes that 2016 has given consumers plenty of new retail space, especially in the Gauteng region, and boosted their choices with new international brands.
This festive season, he believes people will spend mostly on first-order goods, such as food, pharmaceuticals, services and clothing. In contrast, furniture and other discretionary purchases are likely to be least appealing to shoppers.
“Dominant regional shopping centres are best poised to attract spend,” reports Gerard who cautions that, even so, trading success relies strongly on a shopping centre’s relevance.
“Shopping centres that successfully compete for market share are those deeply rooted in their communities. They offer a mix of shopping, services and leisure that accurately reflect the community or region they serve. They also take part in more community involvement,” says Gerard.
Adding the seasonal bells and whistles to a festive shopping experience can also help support good holiday trade. Gerard says: “Décor itself plays a small part in driving festive trade. People are generally aspirational and favour shopping environments that are more elegant and engaging. Depending on the community in which a mall is located, entertainment can contribute to promoting festive spend.”
As for online shopping, he notes it still plays a very small role, and only in higher-income areas within metropolitans, so it won’t have a significant impact on bricks-and-mortar retail this summer.
Beyond the festive season, Gerard’s outlook for retail property in 2017 is positive as the shopping centre industry continues to advance.
“As the information revolution continues, the shopping centre mix evolves. Service-based retail will continue to become more prominent. In addition, multichannel and omnichannel
retailing will become more prevalent. Retailers will offer all forms of shopping and do so in a more integrated way. For example, offering online shopping with click-and-collect options from bricks-and-mortar stores.”