South Africans’ penchant for retail therapy has meant that shopping centres traditionally make more money for property investors than any other sector of the SA real estate market, be it offices, industrial buildings, hotels or housing.Over the past 10 years, to the end of 2015, retail property delivered an annualised total return (income and capital growth) of a substantial 16%, as measured by MSCI’s Independent Property Databank (IPD) index. However, ongoing pressure on consumer spending amid SA’s ever-growing pool of new shopping centres is starting to eat into profit margins.Latest industry data and results from listed property funds already reflect noticeable shifts in some of the key metrics that drive the performance of shopping centres. Growth in trading densities (turnover/m²) in the larger malls, which have traditionally outperformed their smaller counterparts, has slowed while the opposite is true for smaller malls, according to the latest IPD SA Retail Trading Density In...
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