Tag: mall

By Londiwe Buthelezi for News24

In the few months before South Africa went into adjusted lockdown level 4 this year, people shopped more in Sandton City than they did in 2019.

The high-end mall started showing above-expectation recovery numbers every time the government eased lockdown restrictions in 2020. In March 2021, its owner, Liberty Two Degrees (L2D), reported that it recorded its best March in five years.

April and May delivered the same out-performance, L2D’s half-year results showed. L2D will share the mall’s June and July turnover growth in a trading update at a later stage.

In April, Sandton City’s turnover was 4.8% more than the mall recorded in April 2019. In May, its turnover was 14.5% ahead.

The Botshabelo Mall in Bloemfontein also far exceeded 2019 benchmarks on those months, and the Liberty Midlands Mall in Pietermaritzburg was ahead of 2019 in May.

“From a foot count point of view, Sandton’s May better than it was in 2019, which starts to indicate that it bounces back very quickly,” said L2D CEO Amelia Beattie.

“It’s an incredibly resilient asset, and it also has a very loyal customer base,” she added.

She said even with offices in Sandton City not back to their full capacity and the Sandton Convention Centre hardly a hive of activity for over a year now, weekday activity in the malls has not died. As for weekends, Sandton City appears to have held its own as a preferred shopping destination, and not just for seekers of luxury items anymore.

“Because Sandton offers so many unique things, people come from everywhere to go to Sandton because it’s an outing, it’s an experience,” said Beattie.

Sales of luxury brands in L2D’s malls have delivered double-digit growth every quarter since Q3 2020. In April and May 2021, they were respectively 84% and 88% ahead of 2019. But turnover for groceries, apparel and technology was also ahead of 2019 before SA went back to level 4 lockdown.

Beattie said luxury brands did so well because the Covid-19 lockdowns have not financially impacted that particular target market. She said even international trends, when looking at sales figures from companies like Louis Vuitton, suggest that consumers are consistently spending on luxury brands.

“There are not thousands of these retailers in the country. It is in one place…Also, we’ve done some good work bringing more international retailers into the Diamond Walk,” she said.

Adidas recently opened its Halo flagship store in Sandton City, which promises an exclusive retail experience comparable to the brand’s other flagship stores in New York, London, Paris, Dubai, Beijing and Tokyo.

Alexander McQueen will soon open shop there, a first in SA. Other luxury brands are moving from their current spaces to open bigger stores within Sandton City. They plan to bring kids’ offerings to their old shops.

“We still see some demand from tenants wanting to come in, and that will support the trade in the Diamond Walk,” said Beattie.

The other businesses in the Sandton City complex – that is, the Convention Centre, Nelson Mandela Square and the hotels – still have not recovered from the initial lockdown slump, save for Sandton Sun, which started trading again in 2020.

“If you went to the Sandton Sun any weekend afternoon, from four o’clock, the queue snakes down the passage to get on to the deck. People love experiences; they love going there.”

Sandton City sees a spike in luxury purchases

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

Mall owner braces for lower rentals

By Londiwe Buthelezi for News24

The owner of Canal Walk, Rosebank Mall and Hyde Park Corner is bracing itself for lower rental rates when tenants’ leases come up for renewal. This comes at a time when landlords are already bleeding from loss of tenants who have been forced to close their shops during the lockdown, leaving malls half-empty.

“While the rate of new Covid-19 infections is declining, we remain wary of the possibility of a second wave and the long-term effects of the pandemic on what was already a weak local economy. We anticipate further negative rent reversions, although at a lower level than in the last two financial years,” wrote the property company in its results announcement on Monday evening.

Hyprop Investments published its financial results for the year ended on 30 June and called 2020 a year that will be recorded in history as “one of the toughest years”. The property group said Covid-19 reduced its distributable income by R434 million in the year ended in June, while the value of its property portfolio across the globe tanked by R4 billion. Almost all the erosion in Hyprop’s property values happened in SA where the combined portfolio was down R3.9 billion.

Commercial property values in SA have been falling because of rental discounts landlords were forced to offer their tenants, as well as lower property income forecast in future. Hyprop also had big tenants like Edcon and Dion Wired closing shop this year.

The company said it successfully reduced its exposure to Edcon from 59 000 square metres to 50 000 square metres. It was able to secure three new Checkers FreshX stores as anchor tenants at The Glen, Rosebank Mall and Woodlands. It said that the space vacated by the Dion Wired had been let to new tenants at Somerset Mall, Hyde Park Corner and Canal Walk, which will now have a flagship PEP store while it was previously dominated by high-end fashion retailers.

Hyprop saw retail vacancies in its malls increase from 0.8% in June 2019 to 2.4% by 30 June 2020. The company also said that its rental revisions declined by 14.5% in the first three months of the lockdown. This means that Hyprop had to accept much lower rental rates on leases that expired during the lockdown. Before the lockdown, its retail rental revisions were already down 13.1% for the eight months ended February 2020. But Hyprop was able to retain 91% of tenants whose leases had expired, and for other tenants, it was able to increase annual rental rates by 7.1%.

“Notwithstanding the relaxation of lockdown conditions post 30 June 2020, rental rates remain under pressure as tenants look to rebuild their businesses. We will continue to assist key tenants, where appropriate, to ensure we have functional malls and acceptable occupancy levels,” wrote the company in its results booklet.

Hyprop said it is looking at introducing of storage facilities and collection points for online retailers among other things to attract new tenants.

By Michael Grothaus for Fast Company

If you’ve stepped into a mall recently you might find it not too surprising that malls are dying. There’s plenty of blame to go around for that too: Amazon, the changing shopping habits of internet-savvy consumers, and major brick-and-mortar retailers offering free shipping—just to name a few.

As a result, malls are becoming ghost towns, looking more fit for the setting of a zombie apocalypse movie than a setting where people congregate to shop. Matter of fact, as Business Insider points out, 25% of malls will shut their doors by 2022, and more than 9,300 retail stores are expected to have closed in 2019–many of them in malls.

That’s why it’s no surprise that mall owners are taking rather drastic steps to keep retailers from leaving. Matter of fact, popular fashion chain – and mall stalwart – Forever 21 just reached an agreement to sell its beleaguered business for $81-million. The buyers? A group that includes Simon Property Group, Brookfield Property Partners and Authentic Brands, reports CNBC. Simon Property Group and Brookfield Property Partners are large owners of malls.

In other words, the two groups are buying their former tenant, in part at least, to keep that tenant in their malls. The groups’ fear is that if a large, popular chain like Forever 21 leaves those malls, overall foot traffic to those malls will drop, resulting in lower sales for all stores—and potentially more of those stores shuttering.

Simply put: Simon Property Group and Brookfield Property Partners buying Forever 21 is an attempt to stop more of their malls from becoming ghost towns. Simon Property Group’s malls have more than 100 Forever 21 stores in them alone.

This isn’t the first time Simon and Brookfield have bought a struggling retailer to keep their malls from becoming vacant, CNBC notes. In 2016 Simon and General Growth Properties (now owned by Brookfield) rescued Aeropostale from bankruptcy, keeping the retailer in its malls. As mall traffic continues to decline, it’s possible more mall owners could take similar steps in the coming years to ensure the death of malls isn’t a foregone conclusion—or at least that their demise is slowed.

Menlyn Park Shopping Centre is close to completing its ambitious R2.5 -billion redevelopment which will position it as the largest mall on the continent, and a sought-after destination for shoppers from the surrounding areas as well as farther afield. Retailer and shopper demand was the driving force behind the giant makeover, which has created a total lettable floor space of over 170 000m2.
The new Menlyn Park Shopping Centre will open its doors for the first time on Thursday 24 November 2016.

“We’ve put together a fantastic tenant mix that caters to all our shoppers,” says Olive Ndebele, general manager of Menlyn Park Shopping Centre. The centre attracts residents of all the surrounding and outlying suburbs of Pretoria, a large contingent of foreign businesspeople, diplomats and holidaymakers, and keen shoppers from other African countries, such as Nigeria and Mozambique, where big-name items are hard to find.

Among the established anchor tenants and top international brands making Menlyn Park their home are such on-trend fashion drawcards as Zara clothing, Fabiani menswear and H&M Clothing. “Menlyn Park is the leading shopping destination in Pretoria and we’re proud to be bringing our customers value through fashion, quality and sustainability at the best price,” says Amelia-May Woudstra, public relations manager for H&M Clothing.

Menlyn Park Shopping Centre introduced a large, accessible grocery section during one of the two phases of the redevelopment, anchor tenants Checkers Hyper, Food Lovers Market, New World Discount Stores and Pick n Pay were introduced. “I love the fact that I can get all my monthly groceries from a variety of stores in the same area,” explains Sarah van Zyl, a frequent shopper at Menlyn Park Shopping Centre.

Another major drawcard will be Central Park, an open-air piazza surrounded by beautiful Pride of India trees and edged with popular restaurants.

Ndebele says that Menlyn Park will reaffirm its place as the number-one destination in Pretoria for the best entertainment and shopping all year round, with special offers, events and pop-up sales and stores to cater for the whole family.

One of these, coming soon, is “Black Friday”, a popular event in America for the start of the Christmas shopping season, and which is also gaining popularity in South Africa. “We decided to introduce this bargain fest last year and it was hugely successful,” says Ndebele. Shoppers will be given an opportunity on Friday 25 November to take advantage of massive discounts from many stores at Menlyn Park.

Menlyn Park Shopping Centre has also introduced a “Park and Ride” service at the Glenstantia primary school from 24 November to 27 November 2016. Menlyn Park is providing this service to facilitate overflow parking during their launch and Black Friday. The service runs every 30 min from 8am to 5pm. “We want to offer our shoppers every convenient service available, to improve their shopping experience with us,” explains Ndebele.

Menlyn Park Shopping Centre will be extending its shopping hours from 24 November to cater for their customers’ busy schedules. The centre will be open from 9am to 9pm every day except for public holidays, when it will close at 5pm.

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My Office News Ⓒ 2017 - Designed by A Collective


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