Some of South Africa’s biggest mall owners, including JSE-listed property funds and institutions, have reported a marked uptick in consumer spending in recent months.

Retail-focused listed fund Hyprop Investments, whose R10,8bn property portfolio includes landmark malls such as Cape Town’s Canal Walk and Hyde Park, the Mall of Rosebank and The Glen in Johannesburg, has recorded 11% growth in sales turnover in its centres in first quarter 2010.

Hyprop CEO Mike Rodel says foot count (number of shoppers) was up 7% over the same time. Early indications are that turnover growth continued to accelerate at most of Hyprop’s malls in April. At the Glen in the south of Johannesburg for instance, which was recently expanded from 55,000sqm to 75,000sqm, trading densities (turnover/sq m) averaged R1,900/sqm in April, up from an average R1,700/sq m in 2009. Rodel says the mall’s Edgars and Woolworths stores recorded sales growth of 35% and 30% respectively in April (y/y).

There has also been renewed demand for retail space since the beginning of the year with Hyprop’s overall vacancy down from 18,000sqm to 16,500sqm since end-December 2009. That represents less than 4% of the total portfolio. “The retail recession appears to be over, with consumers definitely starting to spend again,” says Rodel.

JSE-listed Acucap Properties and Sycom Property Fund, who together own around 500,000sqm of retail space, have also seen double-digit turnover growth at some of its malls in first quarter 2010. These include Vaal Mall in Vanderbijlpark (+14,2%), Fourways Crossing in Johannesburg (+12,9%) and Hillcrest in Durban (+10,6%).

Paul Theodosiou, MD of both Acucap and Sycom, says as far as individual retail categories are concerned homeware and durable goods are making a particularly strong comeback after a dismal 2009. Results released in April by Redefine Properties and Fountainhead Property Trust point to a similar trend of higher sales and lower vacancies.

Life assurer Old Mutual has also reported improved trading conditions at many of its shopping centres. The latter include stakes in large regional centres such as Menlyn Park in Pretoria, Gateway Theatre of Shopping in Umhlanga and Cavendish Square in Cape Town.

Phil Barttram, head of research at Old Mutual Investment Group Property Investments (Omigpi), says their latest foot count figures indicate that people are returning to shopping centres. The Omigpi Retail Index, which is a composite of the trading performance of malls in the Old Mutual portfolio, shows that annualised trading densities rose by 4,9% for the year to March 2010, which is well off the lows of late-2008.

Barttram says spend per head grew by almost 5% for the year to March, a significant improvement from the lows of September 2009. Several categories within Omigpi’s centres are showing signs of recovery, in particular the clothing stores. Barttram says bottle stores continue to perform well while the home furniture sector is back in positive growth territory. The one category still struggling is music retailers.

“All indications are that South African consumers are starting to turn the corner. Although centres in specific oversupplied nodes will still have to face the likelihood of death or dilution as trading densities find their balance, we remain generally positive and believe that lower inflation, improving credit conditions and pent-up consumer demand will keep us on the road to positive retail growth in 2010,’’ concludes Barttram. – Joan Muller

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