Prospects for retail real estate remain robust - judging by plans and performances by some of the Western Cape’s best-known shopping centres.
SA’s largest property holding company Growthpoint reported in results for the six months to end December, that its flagship V&A Waterfront property continued a strong sales performance with year-on-year sales growth to December up around 19% on a rolling 12-month period.
Growthpoint added that trading densities were also strong at 15.9%. The V&A wooed more tenants like Seelans, Swatch, Luisa Spagnoli and Scotch & Soda. The company contended that the V&A trading and sales densities continued to outperform its benchmark competitors (super regional shopping centres) across the country) on property densities.
The shopping precinct also secured the first H&M and Hamley's flagship stores (some 5,600m²) – which are scheduled to open in the last quarter of 2015 (occupying the old Red Shed space.)
Plans have also been passed for a 15,000m² extension to the Victoria Wharf Shopping Centre, and plans are currently being developed to meet the retailer demand. Growthpoint anticipate that this project will kick off next year.
Shopping centre specialist Hyprop reported that it had increased the value of its 80% stake in Canal Walk by R200m to R6.2bn in the six months to end December 2014. Vacancy levels in this mega-shopping centre situated at Century City is a mere 0,5% and the footcount a remarkable 10.9 million.
Not surprisingly then Canal Walk’s revenue was up strongly at R279m (2013: R201m) and so was distributable income at R201m (R181m.)
Other smaller Cape-based shopping centres currently in the Hyprop fold also performed soundly. The Somerset Mall managed revenue of R110m (previously R77m,) Cape Gate churned R80m (R75m) and Willowbridge in the Northern suburbs boasted revenue of R45m (comfortably ahead of last year’s R25m.)
Another Cape shopping centre stalwart Fountainhead – which owns the Blue Route Mall, Kenilworth Centre and N1 City Mall – is also sounding chipper about prospects. The company reported recently that retail turnover growth increased by a sprightly 17% at the Blue Route Mall in 2014 following its redevelopment.
Vacancy levels sit at only 1.22%, underpinning Fountainhead’s R1,16bn valuation on the revamped property. The company also disclosed that the Blue Route’s average monthly turnover topped R109m with an average monthly foot count of 654,907 shoppers.
Meanwhile the nearby Kenilworth Centre saw expansion to incorporate 142 additional parking bays and another and another R197m will be spent on creating almost 5,000m2 squared of new retail space (as well as additional parking.)
Fontainhead also advised it will make strategic acquisitions that support long-term opportunities to unlock value within its property portfolio. Part of this strategy entails acquiring a motor dealership adjacent to Kenilworth Centre for R35m.
Last but not least, Cape Town’s small retail property play Fairvest appears to be gaining traction at the promising Nyanga shopping precinct. In its latest financial report, Fairvest said the redevelopment project at Nyanga Junction continued with a project to create a food court. The project is expected to be completed shortly and encouragingly all the new premises have been let.
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