Shopping centre retail sales up 30%

Gateway, the Umhlanga centre now being expanded for the second time within a year, showed turnover growth of 29% for December 2006 and 25% for the full 2006 year, to R2.03 billion, says Colin Young, head of institutional investments for Old Mutual Property Group

Bumper year

“The extent of another bumper year for the retail sector is also indicated by 32% growth in annual turnover at Cascades, a Pietermaritzburg lifestyle centre, and of 31% at recently expanded Riverside Mall in Nelspruit,” he says.

“After Gateway, next best growth in December turnover was at Menlyn Park Shopping Centre, Pretoria, where sales increased 19% for the month. This was followed by Cavendish Square in Cape Town, Riverside Mall and Cascades at 18%, 17% and 15% respectively.”
Young says another indicator of buoyant retail trading was the increase of 22% in December spend per head and of 12% for 2006 across the portfolio. Spend per head at the top eight centres in the portfolio increased to R98.25.

Exceptional growth

“Spend per head growth was exceptional throughout the portfolio with December 2006 increases at Menlyn Park of 31%; at Vincent Park Shopping Centre, East London of 24%; at Cavendish Square of 23%; and at Gateway of 22%. On an annual basis, Cascades was top with 20% growth. “

Young says the portfolio generated turnover growth of 16% for 2006 and 19% for December.

Belinda Clur, head of research for Old Mutual Property Group, says that buoyant trading conditions seen in the SA market have again been supported by a stable economic environment, as well as continued growth in the middle class. These are trends that she expects to continue, at least, over the next few years. This bodes well for the retail sector, she says.

“Annualised trading density or sales per square metre grew by 9% in 2006. The largest increase in annualised trading density was at Cascades with 27%, followed by Gateway at 20%. “

Footcount

Clur says footcount across the portfolio grew by 4% in 2006. Gateway showed the highest footcount growth in December of 6%, with over 3 million visitors for the month. Riverside Mall showed the highest growth in footcount over 2006, at 21%, as a result of additional stores and extensions, and Cascades showed 10% growth.

Parking traffic grew by 11% across the portfolio in 2006.