By Londiwe Buthelezi for Fin24
The owner of Sandton City says footfall at the country’s premier shopping centre recovered to 87% of pre-lockdown levels on weekends in October.
Its other big malls, such as Eastgate in the East Rand and Liberty Midlands Mall in Pietermaritzburg are recording more customer visits on weekends than they did before the lockdown.
And what have people been frequenting the malls for? Looking at retailers’ turnover in Liberty Two Degrees’ malls, they have been shopping for luxury and tech goods, as well as more obvious grocery and supermarket items.
In fact, luxury brands contributed 8.1% towards total turnover at L2D malls even though they only account for less than 1% of mall space. The rapid recovery in demand for luxury brands is defying expectations in a country where over 43% of people are now unemployed if you include discouraged jobseekers after 2.2 million more people lost their jobs in the third quarter.
But a 10 point improvement in consumer confidence in the three months to end-September – after it reached a 33-year low in June as shown by the FNB/BER Consumer Confidence Index – was perhaps a telling sign that those who still have the ability to spend will gradually go back to their shopping habits.
L2D said the recovery for luxury brands was driven by domestic demand.
But while people are out shopping for luxury items again, they aren’t yet flocking to hotels. L2D said the Sandton Sun hotel is currently the only hotel in its portfolio that is operational. But its occupancy rate still stood at 30.9% in September, 10 percentage points above the 20.9% recorded in August.
The Sandton Intercontinental Towers, Garden Court and the Convention Centre have been closed since March 2020. But it’s not only hotels that are giving L2D a headache. The company said vacancies across its property portfolio increased again from 6.1% in August 2020 to 7.6% in October. Office vacancies increased to 15.1% by the end of October 2020, with Melrose Arch being the most affected.
“The effects of Covid-19 continue to drive the downsizing of office space,” wrote L2D in a trading update released on Friday.
The retail vacancy rate also continued to increase with Eastgate Mall being the largest contributor. But the company said its team had secured leases for further 900 square metres of space, which will reduce the Eastgate’s vacancy from 7.0% to 6.3% in the fourth quarter.
Image credit: Michael Turner