Retail landlords are stepping up the fight for market share as SA’s retail property sector continues to defy the country’s sluggish economic backdrop, with major retailers expanding trading space and rolling out new store formats.
This comes as retail stocks have remained largely flat in 2025, underperforming expectations, in stark contrast to the steady gains seen in retail property fundamentals.
According to the latest FNB property broker survey, retail property sales activity is now seen as the weakest of the three main commercial property classes, due to persistent pressure on consumer confidence amid a stagnant economy. But on-the-ground fundamentals suggest a more nuanced picture, as expansion activity remains strong.
“We’ve seen positive rental growth across most retail segments, and the rent-to-sales ratio is at its lowest in years — a clear sign that tenants are performing well and rental increases are being backed by solid sales,” independent property analyst Keillen Ndlovu said.
Some of the planned store expansions are being driven by retailers such as Pepkor, which aims to open 250-300 new outlets in its 2025 financial year, while Foschini Group is set to add 100 stores, including its stand-alone beauty box format. Spar plans to roll out 100 new store outlets by the end of 2026 and Boxer is targeting 25 new superstores and 35 liquor outlets per year, Ndlovu said.
“Developers continue to look for new opportunities, and local municipalities are making land available where possible as commercial properties boost local economies, support job creation and generate income through rates and taxes,” he said.
Banks, while still cautious, are funding new developments that are largely pre-let to national retailers and established tenants, Ndlovu said.
New retail concepts such as Woolworths’ Wine Cellar, Checkers’ UniQ clothing, Foschini’s Beauty Box, Truworths’ stand-alone stores, as well as Moskow, Ginger Mary and Daniel Hechter, are injecting fresh energy into the retail property landscape.
One standout example is Redefine Properties’ announcement of a R70m upgrade to Park Meadows Shopping Centre on the East Rand. The redevelopment is set to enhance the shopping experience and strengthen the centre’s position as a convenient, everyday destination for local communities.
The upgrade will see the introduction of Woolworths Food, WCafé and WCellar, alongside an expanded Food Lover’s Market featuring a new liquor section, broadening the centre’s grocery and dining options.
Ndlovu warned that there are risks ahead. “Cannibalisation of existing stores and malls is something to watch closely, especially in a low-growth environment. In some cases, new malls developed out of town have drawn shoppers away, leaving high streets struggling. Undermanaged or poorly maintained centres also suffer as tenants migrate to newer, better facilities.”
Retailers remain dynamic, continuously adapting to evolving consumer behaviour. Yet, there are no guarantees that all new concepts will succeed, he said.
“Walmart is also launching their new stores soon. It’s the best kept secret. Whatever approach they will go for, it is going to create competition for major retailers such Checkers, Pick n Pay and Woolworths. The rollout of new stores will slow down at some point and not all the new stores will do well. Economic growth is key to continue to sustain the growth in the retail space,” he said.
The latest SA Property Owners Association retail trends report, compiled with MSCI, found that smaller malls are outpacing their larger rivals.
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