RETAIL PROPERTY HEARTBEAT LOOKS STRONG : CLUR SHOPPING CENTRE INDEX
Trading density performance and growth at South African shopping centres in 2022 was the highest in four years , according to the Clur Shopping Centre Index . The index is derived from The Clur Report , an asset management industry standard , tracking performance for listed and unlisted property funds at more than four million square metres of prime retail space in over 100 centres across SA and Namibia .
Despite the tough operating environment , the retail property heartbeat , backed by new leasing activity , looks strong , says Belinda Clur , managing director of Clur International which produces the index .
“ Super-regional and regional shopping centres have maintained the highest trading density levels since mid-2018 , when the Clur indices were introduced . Smaller centres show a consistent improvement . In 2022 , super-regional centres showed the steepest climb in trading density levels ,” she says .
“ These major centres grew year-on-year trading density by 13,6 % to R41,103 / m 2 in 2022 , outperforming annual inflation by 6,7 %. In particular , super-regional centres achieved trading density of R45,933 / m 2 , a 17,7 % increase and outperformance of CPI by more than 10 %. For the Clur index for all centres the growth was 11,5 % to R39,155 / m 2 , 4,6 % better than CPI in 2022 . Small regional and smaller centres grew trading density by 6,9 %, on par with inflation , to R35,057 / m 2 .”
Overall , the renaissance theme in retail property after the Covid-induced downturn , put forward by Clur in a presentation to the industry last year , continued in 2022 , with a further growth surge in centre performance .
“ Significantly , the trading density index for the combined Nov-Dec period for all centres was R52,841 / m 2 , an increase of 9 %. The index for the rest of the year ( Jan to Oct ) was R36,372 / m 2 , an increase of 12,3 %. This underscored a previously noted pattern of festive season business driving trading density levels with the rest of the year boosting growth levels .
“ These results highlight the extent of consumer support for physical retail space and the important role the sector plays in supporting communities as well as the economy . They also show that agility in response to shifting consumer dynamics and tailored tenant mixes are helping drive the improvements in trading densities .
“ These factors are rewarding astute asset managers who recognise the fundamental differential has to be the experience that is offered within the bricks and mortar of the physical shopping centre .
“ Moreover personal touch , and an important relationship economy , underpinned by excellent service , customer knowledge , thoughtfulness and philanthropy are increasingly to the fore as people value these aspects highly after isolation and ongoing hard times . “
Clur says new leasing activity suggests a shift from a survival to more of a lifestyle oriented tenant mix as the Covid-19 related hard rules and their dire implications become a distant memory .
“ There ’ s been a distinct uptick and renewed confidence in apparel , with the segment taking up about a third of new lettings in terms of gross lettable area ( GLA ). Specific activity is seen in unisex wear , athleisure wear , shoes and men ’ s wear . Unisex wear outlet sizing shows a cautious approach , with stores smaller than 500m ² currently being dominant , and are often smaller than 250m 2 . Women ’ s wear stores show a conservative approach with most being below 250m 2 . “
The homeware , furniture and interior as well as hardware categories continue to be popular and see growth , with about 20 % of new lettings GLA going to this segment , says Clur .
“ There ’ s a specific focus on trendy kitchenware , décor inspired soft furnishings and lighting , beds and DIY .
“ Speciality stores are a key theme , making up about 15 % of recent lettings GLA , showing diversity across butchery , green grocers , oriental foods and spices , sweets and chocolates , tea and coffee specialists , pet stores , gifts , tobacconists , vape shops as well as toys .
“ Food service also features prominently , with a diverse spread of mostly fast casual dining formats and fast food stores taking up about 10 % of the new lettings GLA . These are more or less equally represented in terms of store numbers , with a GLA weighting toward fast casual dining .”
Clur says department stores , at about 8 % of new lettings GLA , have changed their form . Major discount department stores have gained traction in recent years , whilst traditional department stores are mostly being pared back to a more successful mini format .
“ Health , wellness , beauty and grooming remains buoyant , contributing in the region of 7 % to new lettings GLA .
“ An already strong technology sector continues to grow , with a number of smaller , but high-powered stores spanning cell phones , electronics and games . This sector typically yields one of the highest trading density and growth levels across categories .
“ Banking , medical and convenience services play an ongoing important role , whilst the rest of the new lettings activity is peppered with accessories , jewellery , optometrists , sunglasses , books , stationery and some luggage stores .”
Belinda Clur , MD Clur International
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