06 Nov 2008
Retail is a tough sector to be in at the moment.
The harder pill to swallow is the fact that the prevailing market conditions look set to stay that way until at very least the second quarter of 2009.
With reports of a global retail slump combined with rising interest rates and inflationary pressures, South African consumers have had to cut back. The result: retailers are feeling the pinch; shopping centres are therefore not showing growth. Investors and/or owners will therefore have to tighten their belts or look at strategic changes to maintain their position.
JHI have highlighted opportunities that should be considered:
1. Look at the underserviced market
Opportunities exist in townships, as well as the remaining rural South Africa. Many of these areas now have fast-growing residential populations, which are highly aspirational and want the same kind of shopping experience that they would get in a mall in a more affluent area. Although timing is an important factor in the success of such shopping centres, these developments are very real opportunities to explore.
2. Look at mixed-use developments
The growing trend in South Africa is mixed-use developments, which was made popular overseas e.g. in Europe. The reasoning behind this is due to the move to "densify" urban areas, and the need to cope with ever-increasing traffic congestion on the roads.
A case in point is the mixed-use development at Greenstone Hill near Modderfontein, where a cross section of the population is being established around the node. The result: Greenstone Shopping Centre offers a full range of stores - from PEP to more exclusive boutique shops to cater for the broad LSM group. By implementing this strategy, Greenstone Shopping Centre is currently in the rare position to achieve real growth.
3. Know your market
The truism that knowing the market is critical has never been more important than now. Shopping centres only have a short space of time to succeed, and achieving a balance between attracting new customers, and keeping existing customers coming back – which is critical.
One simply needs to spend more time on marketing in shopping centres, and the marketing done must inform the relevant parties about their customer and give an idea of how their needs change.
4. Plan for the upturn
Times may be tough now, but the inevitable swing of markets will see the country in an upturn in time. Today it takes 9 to 18 months to plan a new shopping centre, and a very real opportunity is to start planning now for when the market does turn.
The trends today point to the fact that South Africa is still a growing consumer market and that opportunities do still exist. With continually changing and growing lifestyle demands, there will always be new and exciting opportunities for the country – potential developers/investors just have to keep a look out for them.
For more information click here to visit the website.
House for sale in Maokeng R 850 000
House for sale in Palm Ridge R 290 000
House for sale in Parkrand R 1 750 000
House for sale in Farrar Park R 1 450 000
House for sale in Cinderella R 1 350 000
Apartment / Flat for sale in Winchester Hills R 649 000
Apartment / Flat for sale in Glenvista R 1 050 000
Apartment / Flat for sale in Umhlanga Ridge R 1 050 000
Apartment / Flat for sale in George South R 525 000
House for sale in Cola Beach R 2 000 000
If you are using Internet Explorer 8 or higher, please verify that your Internet Explorer compatibility view settings are not enabled.
For the best browsing experience, update to the latest Version of Internet Explorer or try out Google Chrome or Mozilla Firefox.
Please contact our Property24 Support Team for further assistance. Tel. +27 (0)861 111 724