AnalysisCommercial News

Neighbourhood retail attractive to independent investors

Ongoing moves by property funds to consolidate their retail assets is creating opportunities for independent investors to break into this lucrative sector, which despite the country’s myriad economic challenges, is nevertheless reporting impressive results.

According to the Clur Shopping Centre Index, trading density performance and growth at South African shopping centres in 2022 was the highest in four years. The index is derived from The Clur Report, an asset management industry standard that tracks performance for listed and unlisted property funds of more than four million metres of prime retail space (100+ centres) across SA and Namibia.

High Street Auctions Director Greg Dart says property funds and REITs with extensive retail portfolios started a process of realigning investment priorities a couple of years before the pandemic irrevocably changed the world.

“In 2018 and 2019 alone, High Street realised approximately half a billion rand for Shoprite by auctioning off a dozen of its non-core assets.

“Subsequently we’ve done the same for several other funds and even at the height of the pandemic, investor appetite for our auction retail properties didn’t wane.”

Dart says the irony post-Covid is that consumer attraction to neighbourhood malls, community convenience centres and regional town malls has rocketed.

“The pandemic has changed our habits as consumers. People won’t travel extensively anymore on a daily basis, unless they absolutely have to.

“This means consumers tend to stick close to home, and even those who commute to the office prefer to make a quick local pitstop after work if they’re not shopping for something special.”

Dart says a superb retail opportunity on the block in the April 20 auction at the Bryanston Country Club is the bustling 7 858m² Sparrow Shopping Centre in the heart of Modimolle in Limpopo.

“Regional malls in general are sterling investments, but what makes this one particularly enticing is the Pick ‘n Pay anchor with a remaining lease term of 21 years.

“Other tenants include a Pick ń Pay liquor store, Wimpy and Ocean Basket restaurants, mobile service providers and a pharmacy. There’s also plenty of on-site parking and a generator to mitigate loadshedding.”

Dart says the neighbourhood and community malls that are currently most successful, have undertaken thoughtful transformations of their tenant mixes to reflect the demographics and needs of the consumers they serve.

“A good rule of thumb is putting quality local convenience at the top of the list for essentials that include groceries, coffee, cash, food outlets and leisure services.

“The Sterland Mall in Arcadia, Pretoria, which High Street will also auction on April 20, is a perfect example of retail done right. The 9 952m² precinct is anchored by Pick ń Pay and a Pick ń Pay Liquor Store, but offers shoppers a great deal more.”

Other attractions at Sterland Mall include:

  • 11 cinemas;
  • A Spur restaurant;
  • Steers and Fishaways fast food outlets;
  • A gym;
  • ATMs;
  • On-site parking; and
  • Generators to mitigate loadshedding.

Two smaller centres will complete the retail auction quartet on April 20 – one in Melville in Johannesburg, and the other in Dundee in KwaZulu-Natal.

Dart says High Street’s live and virtual auction featuring retail, residential and commercial properties, will start at noon at the Bryanston Country Club, 63 Bryanston Drive in Bryanston, Johannesburg. It will also live-stream across the world via High Street’s website, its social media channels and the High Street Auctions app.

Bids will be accepted from the floor, by telephone and on the app.

  • Prior to the auction, join High Street Auctions as it proudly welcomes keynote speaker Dr Adrian Saville, Professor of Economics, Finance & Strategy at the Gordon Institute of Business Science (GIBS) to a networking brunch that will analyse key market drivers and investment trends. For more information on the brunch and the auction, visit www.highstreetauctions.com.