Community and smaller malls shine as new retail frontier emerges

This is according to the Clur Shopping Centre Index, part of the broader Clur Collective asset management support platform, which helps listed and unlisted property funds understand asset health and optimise returns across more than 4.1 million square metres of prime retail space and 140 retail categories in South Africa and Namibia.

This coverage will soon increase to more than 5.4 million square meters.

“With the drive to improve the world becoming more important, community-focused retail, as a new frontier, is a key consideration for shopping centre strategy. This community spirit is signalling the need for socially impactful retail,” said Belinda Clur, CEO of Clur International, which compiles the index.

She says the national Clur index for the second quarter of 2024 for all centres closed with an annualised commercial density of R41,343/m2 and year-on-year growth of 3.6%.

“This represents a further contraction of -0.9% compared to the first quarter of 2024 and -1.5% compared to calendar year 2023. This growth was also lower than the June 2024 CPI by -1.5%.

“The highest retail densities were seen at the two size extremes of super-regional centres, at R49,177/m2, and community and smaller centres at R42,497/m2. The highest year-on-year percentage growth was seen in super-regional and regional centres, both at 3.9%.

“While community and smaller centers showed the lowest growth rate of the group, at 1.7% in Q2 2024, they were also the only segment to show growth expansion relative to Q1, at 0.1%. In contrast, super-regional centers showed the largest contraction, at -1.5% relative to Q1, and the index for all centers contracted by -0.9% over the same period.”

Clur says the Q2 2024 provincial indices for the Western Cape, Gauteng and KwaZulu Natal again saw the Western Cape as the best performer, with a commercial density of R45,638/m2 and year-on-year growth of 5.8%, and is the only index to outperform the June 2024 CPI, by 0.7%.

“KwaZulu-Natal showed the next highest business density of R42,417/m2, and is the only index to show negative year-on-year growth of -2.2%. However, it is the only province to show an expansion in growth relative to Q1 2024 of 0.4%. Gauteng had the lowest business density of the three provinces, at R40,632/m2 and the second highest year-on-year growth rate of 4.9%.”

Clur says a comparison of growth rates between years, considering only the second quarter against the remaining nine months of the rolling 12-month period, shows that nine-month trade density is higher across all segments, likely due to the festive season falling within this period.

“However, while year-on-year growth is also higher in most cases, community and smaller centres and the province of KZN buck this trend, showing higher growth rates during the three months of the second quarter compared to the previous nine-month period.

“This counter-trend momentum these segments have experienced in the past quarter suggests that even better prospects are emerging in these segments.”

Clur says there is a return to important basic principles, with a focus on what really counts and what it takes to make the world a better place.

“This started as a focus on personal wellbeing, seen in demand for athleisure, fitness, health and beauty categories. This has now evolved into a broader community and global wellbeing theme.

“This is compounded by a general shift in values ​​characterised by a focus on quality of life and experience, dignity from a human, animal, technological and planetary perspective, balance and time seen as a currency more valuable than money.

“Social impact retailing, as a new frontier of retailing in South Africa, effectively brings retailing to where it needs to be, to better serve communities and drive economic opportunities within their localities. In these cases, by bringing retailing to the doorsteps of struggling consumers, transportation costs are alleviated, increasing disposable spending on essential food and other products, thereby raising community living standards and economies.”