Retail landlords are seeing a widening gap in performance across mall formats, as trading momentum holds in large centres but fades in small nodes.
Trading-density growth reached 6.2% in small regional malls in the fourth quarter, while community centres recorded flat performance.
Superregionals and regional malls recorded steady mid-single-digit gains, driven by firmer footfall and more resilient consumer spending, according to the latest retail trends report from the South African Property Owners Association (Sapoa) compiled with MSCI.
“Food service remains the standout performer since mid-2022, continuing to anchor cumulative growth, with health and beauty also expanding. However, apparel sales lost pace in smaller formats in the fourth quarter, pointing to mounting caution among consumers as discretionary spending comes under pressure,” the report said.
For most of last year, small shopping centres were the outperformers, consistently recording stronger trading-density growth than their larger counterparts before momentum tapered off in the fourth quarter.
“Trading growth is increasingly driven by spend rather than footfall, with larger-destination centres capturing a bigger slice of discretionary and experiential spending, while convenience-focused formats are seeing flatter traffic,” the report says.
In a pre-close update for the year ending February, Redefine Properties, whose retail portfolio is concentrated in superregional and regional malls, said turnover growth at its large-format centres has accelerated to match that of convenience centres, pointing to a more even trading performance across formats.
Footfall stabilised during the fourth quarter of 2025, with October seeing year-on-year gains, November remaining steady, and December easing slightly against a strong festive season in 2024.
For property owners, the trend remains cautiously positive.
— Sapoa
Malls are operating in a slow-growth environment, with 2025 GDP at 1.1% and inflation at 3.2%, supporting a 6.75% repo rate. High unemployment, weak confidence and slow reforms persist, though sovereign upgrades and improved investor sentiment provide some relief.
Retail vacancy ended the year at 4.5% in December 2025, down from the 2021 peak. Neighbourhood (2.9%) and superregional (3.7%) centres remain the tightest, while small regionals eased to 6.3%.
Gross rental growth firmed to 5.9% year on year, driven by stronger leasing activity and fewer concessions in better-performing centres.
“For property owners, the trend remains cautiously positive. Strong performance in October and steady activity in November compared with prepandemic levels support confidence in a stabilising retail demand base, even as December reflects continued sensitivity to consumer affordability and broader economic conditions,” reads the report.
Looking ahead, the report notes that if footfall stabilises in early 2026 and spend per visit holds up, retail assets could see stronger rent reversions, higher occupancy, improved tenant retention and a more stable outlook for net operating income.
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