Shopping malls are getting bigger and bigger
South Africa has the sixth most shopping centres in the world
Malls are getting bigger and bigger.
This is according to a recent study conducted by Morgan Stanley Capital International (MSCI) Real Estate South Africa on behalf of the South African Council of Shopping Centres (SACSC).
New data indicates that the average size of centres developed have steadily increased in size since the 1990s with centres slated for completion between 2017 and 2020 being significantly larger than those developed during the 1990s and 2000s.
This trend towards larger centres may be explained by developers opting for larger formats in order to dominate its immediate catchment area and attract a higher proportion of national tenants, thus strengthening the centre’s position within its catchment area.
The data also indicates that proposed centres planned in the country’s city regions, local/niche towns and service towns are all now 100 per cent larger compared to those developed during the 2000s.
South Africa ranks as sub-Saharan Africa’s most saturated retail market, representing 88% of the available space in the region.
According to the SA Shopping Council, South Africa has the sixth most shopping centres in the world – and yet, we continue to build more malls.
Phil Barttram, executive director MSCI, said there is a unique perspective of the link between retail space, economic activity and population density.
“MSCI’s latest research, based on SACSC’s shopping centre directory, provides a perspective of the linkage between expected retail mall space, economic activity and population densities. Given a highly competitive environment for malls in specific nodes, we believe that centre selection within the retail segments will become increasingly important. There are fundamental drivers of mall defensiveness and it will be the malls that best exploit these factors that will prove to be more resilient in the times ahead,” he added.
In 2016, Menlyn Park in Pretoria, now the largest shopping centre in South Africa, embarked on a R2bn redevelopment that added 50 000 square metres of additional retail space to its already massive footprint, making it one of the largest malls in Africa.
In February last year, the Fourways Mall expansion project broke ground. This project, costing R23.7m, will see the mall become a retail behemoth of 175 000 square metres. The Pavilion as well as Ballito Junction, both in KwaZulu-Natal, have also undergone expansion projects.
