Sandton City fully let for the first time in 45 years
One of SA’s oldest malls shows there is still life in bricks-and-mortar retail
Showing there is still life yet in bricks-and-mortar retail, Sandton City, one of SA’s premier shopping malls is now fully let for the first time, having spent the past three years signing up more luxury brands than any other centre in SA.
The 45-year-old super regional centre, which has 147,940m² of retail and leisure space, has zero vacancies, while other superregional centres are averaging 5.8%, according to the SA Property Owners’ Association.
Sandton City also includes 51,200m² of office space.
Liberty Two Degrees (L2D) COO Jonathan Sinden said the company spent the first 10 months of 2018 filling 15,000m² of its then vacant retail space, 8,000m² of which had been previously occupied by Stuttafords, which shut down in 2017.
Sandton City owners Pareto, Liberty Group and L2D have also brought in a number of pop-up stores and international standalone branches.
Metope investment analyst Kelly Ward said the asset managers at L2D had done a “phenomenal job” filling all the vacancies at Sandton City while SA’s economy was in a recession.
“A zero-percent vacancy is unusual, and well done to them in this challenging environment. Especially interesting for the market is the new international tenants, which will no doubt draw in foot traffic and differentiate the centre,” she said.
Sandton City, which has more than 300 tenants, had also managed to attract “first to the country brands" such as Christian Dior Cosmetics, Tod’s, House of Samsonite, Camicissima and Coach, beating competitors such as Mall of Africa and Fourways Mall.
She said it was notable that some of the space was filled with temporary or pop-up shops, but “nevertheless a full centre makes for a better shopping environment, and at least they are able to collect rent on those temporary stores”.
“Shopping malls do normally run at a small vacancy even in good times in order to take advantage of opportunities or to allow for tenant churn,” she said.
Amelia Beattie, the CEO of L2D, which owns 24.98% of the mall, said Sandton’s tenant mix had been improved tremendously over the past two years, as had the ease of doing shopping, which had kept many customers loyal to the centre.
“In this environment we are trying to gain returns wherever we can and it’s working in our favour that there is no vacancy at Sandton City, as the trading density here is actually beating other superregional centres,” she said.
Sandton City is expecting trading density growth to be better this festive season than in 2017, she said.
Head of listed property funds at Stanlib, Keillen Ndlovu, said Sandton City “remained the premium address for any major retailer who needs market presence in SA”.
“It’s well located, with the Gautrain right next to it and it’s supported by a huge catchment area, as well as a growing number of office and residential buildings in the node,” he said.
Analysts generally say that online shopping remains a fraction of retail in SA, so it is not a huge threat to Sandton City’s future yet.
World Wide Worx MD Arthur Goldstuck said online retail only accounted for 1.4 % of total retail sales in SA.