Two prime properties — the V&A Waterfront in Cape Town and the Mall of Africa in Midrand — have proven to be cash cows for property owners Attacq and Growthpoint.
The two companies released their annual results this week, showing a strong performance for the year ended June.
Mall of Africa — the third largest single-phase mall on the continent, which has been dubbed South Africa's busiest mall — has experienced a surge in demand for space, with the property developer “moving things around” to try to accommodate prospective tenants.
Attacq’s head of asset and property management in retail, Michael Clampett, said the mall was seeing more demand from local companies.
“Across our retail portfolio we have opened stores by small business owners. We do have international brands that are coming but the focus is mostly on local demand,” he said.
While new clients are coming into the mall, big retailers are expanding their operating space.
“We are currently expanding Checkers Hyper, we have reduced space for Cotton On, Mr Price is expanding as well. So there is a lot happening, with either demand to be in the space or to expand the space retailers already have.”
With three new middle-class brands, including Coach, a handbag and accessories store, expected to open at the mall, Clampett said there was a lot of work under way to ensure they get the space they need.
“Some of the space we will get from cutouts from other shops, while others we may have to relocate to accommodate the new stores. So, we are actively finding ways to execute these deals.”
While the national vacancy rate at malls remained at 4.4% in the second quarter of 2024 according to the South African Property Owners Association, Mall of Africa, with more than 131,000m² of gross lettable area, has a vacancy rate of 0.6%.
A pop-up store that opened for a week in August to showcase clothing items from Chinese online retailer Shein increased foot traffic and attracted new shoppers to the mall.
Some 43% of the prospective buyers who went to the pop-up store were visiting Mall of Africa for the first time. Clampett said 15% of these first-time visitors returned to the mall within seven days to check out other stores.
“We also found that some of the shoppers visited other stores such as Levis, Cotton On, The Fix and Mr Price. So our local retailers also benefited from this pop-up store.”
Occupancy across Attacq’s South African assets increased to 92.8%. Headline earnings per share also increased by 10% in this period. The property company declared a full-year dividend of 69c per share.
In December 2023 alone, the V&A Waterfront recorded a whopping R1.2bn in retail sales, a 16% increase from the year before
In Cape Town, the V&A waterfront remained a standout performer for Growthpoint, attracting streams of shoppers despite tough economic conditions.
The company said retail sales increased by 14% compared to 2023, driven by international and domestic tourism.
In December 2023 alone, the V&A Waterfront recorded a whopping R1.2bn in retail sales, a 16% increase from the year before.
The entertainment and shopping mecca had a vacancy rate of just 0.4%.
Alex Kabalin, V&A Waterfront retail executive, said while the mall may be smaller than some other regional shopping centres, it remains in a unique position.
“There's a growing demand for retail space within our precinct, which has led to a vacancy rate that is significantly below the market average.”
Growthpoint Properties South Africa CEO Estienne de Klerk said the strong performance of the V&A Waterfront was bolstered by the completion of new developments in the area, attracting more tourists.
He said this was expected to continue as developments spring up adjacent to the mall.
“Construction has commenced for 5 Dock Road, where 100 residential units are being built to sell, with completion expected in 2025.”
Two new hotels are also in the pipeline in the area. Growthpoint expects at least eight new hotels to open in Cape Town over the next two years due to tourist demand.
De Klerk said the reconfiguration and expansion of an existing wing in the mall is under way to increase its gross lettable area.
“We are in the process of expanding the mall to increase its gross lettable area to 3,759m². This area will be dedicated to the big five international luxury brands such as Gucci, Louis Vuitton and so forth,” he said. It is expected to open to the public in November 2025.
Across its retail portfolio in South Africa, vacancies were at 5.5%.
“We have done some work at Riverside Square (Vereeniging), Vaal Mall (Gauteng), Bayside, Long Beach (both in Cape Town) and Beacon Bay (East London). So when we remove those recent developments, the actual vacancy in our retail spaces is around 3.5%,” said De Klerk.
Brooklyn Mall (Tshwane) had the largest vacancy at more than 10,000m², following the exit of Game and Weylandts.
Despite strong operational performance for the group, its distributable income declined by 10% in this period. The dividend also dropped 10% to 117.1c per share.
Growthpoint Properties group CEO Norbert Sasse attributed this to high interest rates continuing to have an impact on its income.
Sasse said the group expects a return to positive dividend growth in 2026, when the global cycle would have turned.
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