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  I enjoy walking in Malls from time to time (once or twice a month or once after two months sometimes). Just to see what is out there and what the world has given us as shoppers. Its therapy. I think i...  

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Mall of Africa versus rivals

How does the new kid on the block measure up on one key metric?

Nearly one year after opening, just how well is the Mall of Africa trading? Developer and manager Attacq stated in February that “trading densities exceeded expectations”.

The country’s largest single phase shopping mall, which opened on April 28 2016, “achieved more than 1.1 million visitors per month” through last year. In what could be considered rather limited disclosure, Attacq said a “monthly average trading density of R2 777 per m2” was achieved. Trading density, which measures the the turnover achieved per square metre, is a critical metric for retail. Expansions aside, this is how stores and shopping malls grow: by attracting more shoppers (and better quality range/tenants).

Annual trading densities of selected shopping malls

Nelson Mandela Square1

R65 043 / m2

Sandton City1

R52 715 / m2

Hyde Park Corner2

R50 784 / m2

Canal Walk2

R43 464 / m2

Somerset Mall2

R42 156 / m2

Brooklyn Mall1

R37 644 / m2

Eastgate1

R37 622 / m2

Clearwater2

R37 308 / m2

Willowbridge2

R35 976 / m2

Mall of Africa3

R33 324 / m2

Rosebank Mall2

R33 276 / m2

1 12-month average (to 31 December) as published by Attacq and Liberty Two Degrees

2 Annualised from Hyprop H1 results to 31 December 2016.

3 Annualised from monthly average provided by Attacq for Mall of Africa since opening (eight months).

Sources: Liberty Two Degrees, Hyprop and Attacq financial reports

On a headline level, Mall of Africa is lagging direct super-regional rivals like Sandton City, Canal Walk and even Eastgate. However, these figures need to be seen in context: the Mall of Africa is a brand new development.

One (albeit not 100% precise) comparison, based on publicly disclosed data, is with Rosebank Mall which underwent a major R1 billion redevelopment in 2013 and 2014. It is about half the size of the Waterfall giant, with a total retail gross lettable area (GLA) of 62 413m2, versus Mall of Africa’s 131 000m2 (although, based on Attacq’s reporting of its 80% share as at December 31, the primary GLA seems nearer to 123 000m2).

The Rosebank Mall achieved an average monthly trading density of R2 738m2 in the six months to December 31 2015. This aligned almost perfectly with the reopening of the substantially bigger (and completely developed) mall. That reported trading density was a 33% increase on the prior period (when the centre was effectively a giant construction site). On an annualised basis, the trading density soon after reopening translates to R32 856m2. One wonders just what expectations Attacq had set for Mall of Africa.

Also, when it comes to malls, not all trading densities are created equal. Certain sizes of malls and categories of tenants will generate different trading densities.

In an extraordinarily detailed trading statistics and supplementary information document, Liberty Two Degrees, with stakes in Sandton City, Nelson Mandela Square, Melrose Arch and Eastgate (among other assets) provides colour on trading densities achieved at its malls. In the accessories, watches and jewellery category, Nelson Mandela Square achieved annual trading density of R253 052m2 (with 5.6% of gross lettable area), while Sandton City reported a figure of R212 991m2 (only 2% of GLA). Food services, which makes up 36% of GLA in Nelson Mandela Square, had a trading density of R55 552m2, while in adjoining Sandton City it was slightly lower at R52 802m2 (3% of space).

Data for malls such as Menlyn Park and Tyger Valley (both owned by PIC property arm Pareto) and Gateway Theatre of Shopping and Cavendish Square (both Old Mutual Properties) is not publicly available. Surprisingly, few other property funds with large retail portfolios, including Growthpoint, disclose specific trading densities of their assets. All Growthpoint will say about performance of the V&A Waterfront, in which it holds a 50% stake, is that it has the “best trading density compared to other super regionals in [the] country”. This would suggest it is easily over the R50 000m2 (annualised) mark.

For Attacq, key to growing and sustaining footfall during the week at Mall of Africa will be the completion of office and residential developments in Waterfall. In its H1 results to December 31, it says “trading is expected to increase as Waterfall City and its surrounds continue to densify, extracting further value from Mall of Africa in the years to come”.

The mega developments of new head office campuses for PwC (45 000m2) and Deloitte (43 000m2) will certainly help. These two projects alone will bring an additional 7 000-plus employees to within walking distance from the mall. The incredible development in the Sandton CBD, especially surrounding Sandton City, means it will take decades for Waterfall to achieve the same densities its Sandton rival enjoys, and it’s not clear that it ever will…. 

Hilton Tarrant works at immedia. He can still be contacted at hilton@moneyweb.co.za.

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Not sure if this is an advertorial for Attacq or just a helicopter view of an incomplete assessment of annualised trading densities but in reality it proves nothing. A couple of determining factors is the location of the centre in relation to catchment areas, size of such centres, and the need for the general public to walk kilometres within a centre to get to the preferred shops of choice. Clearwaters, Canal Walk, Eastgate, Cavendish Square, Tyger Valley, Gateway, The Pavillion, Cresta and a host of others fall into this catergory.
Data can provide you with anything you want, but its danger is who massages it to achieve an end result.
In all the above examples they are all poorly designed and in many cases have evolved into their largeness – Cresta is a good example
When will developers realize that bigger is not always better

When did you last spend meaningful time at Tygervalley?

I agree nothing worse than shopping in a huge mall. Walking for miles past over priced boutiques etc. to get to the shop you want. Prefer small strip malls with easy parking and a Woolies Food and Checkers or Spar and a couple of family eateries. Much more convenient and less stressful.

“Trading density, which measures turnover per square meter, is a critical metric for retail”

Real question is, are all the stores profitable ?
Given the option to get out their leases tomorrow, who would go and who would stay ?
No point in measuring turnover per square meter if most of that revenue is generated by just a handful of the heavyweight tenants.

Been to MoA once. Won’t go again.
1. It is TOO big. Way too much walking and walking and walking…did I mention walking??
2. There is nothing of interest there unless you a heavy into clothes.

Hope they don’t screw up like World Wear that tried to focus on clothes and not food

We really liked the smaller Waterfall Corner at the crossroads.

Not a huge selection of shops but good enough for day to day shopping.

i am no retail fundi in the sense i do’nt know what makes things work but i do observe:
Sandton city was the place for a while and now maybe it is becoming a bit jaded- lower caliber of clientelle?
Cresta was a profitable centre from tenants perspective but at each extension tenants seem to be less happy
Cradlestone is a dog , the only winners there are the centre owners

Great idea, lets build bigger malls, while data shows e-shopping is starting to take over, best off all, almost all the retail shops in the malls promote their own online easy access online buying. Why walk, if you can just “click”.

’cause by clicking you get………. a dead brain, no excercise and the pleasure of returing most of the junk you bought, particularly in the clothing area.

You will also add to your ever declining social skills as you fall in love with yourself all over again.

You will also have the pleasure of seeing your bank balance drop at an even faster rate and to a lower level than the MoneyWeb share price.

One thing you will not get is the benefit of ebucks on using your credit card…..cannot swipe it at home?

A shopping mall needs to sell convenience in the least possible time. I do not want to spend my spare-time looking at throngs of depressed people who have no purpose in life.
Give me the wide-open outdoor space and you give me life!

Mall of Africa is, according to yesterday’s Rapport newspaper, one among several others that have been the target of false bomb threats from a business competitor. This has apparently been going on for months and police have apparently now identified the perpetrators. They were pretending to be ISS terrorists and various malls, including this one, had to be evacuated on numerous occasions, a scenario that apparently damaged sales and business of retailers. (Yesterday’s Rapport.)

Shopping malls in the US are standing empty. Go here to see: https://www.facebook.com/deadmalls . This has been a trend for years now. Yes the US is about 10 years ahead of us, but it is coming. The Mall culture peaked in the nineties and is losing steam now.

I enjoy walking in Malls from time to time (once or twice a month or once after two months sometimes). Just to see what is out there and what the world has given us as shoppers. Its therapy. I think in SA we still need Malls as the crime rate is still high also we do not have good public transport systems. Of course on a day to day basis I shop at my local corner shop like most people.

But having said that there is nothing as freeing as walking down Regent or Oxford Street in London or Gran Via in Madrid. Its soul inspiring.

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