#HOPE: Malls are making a comeback
By Terena Chetty, 1Africa Consulting Head of Strategy. As 2023 kicks off the ‘post-Covid’ era, all signs point to malls making a huge comeback.
By Terena Chetty, 1Africa Consulting Head of Strategy. November 2022 marked the opening of the opulent Ocean’s Mall in Umhlanga, Durban. Valued at over a billion rands, this brand new 36,000 square metre mall is part of a larger 4.3-billion-rand development project for the Umhlanga area, comprising a luxury hotel and apartments. The mall itself includes high-end stores, with some international brand stores launching in Durban for the first time. While doors are open for trade, the mall development project is not yet complete, with additional phases scheduled for completion early this year.
Businessman and philanthropist Vivian Reddy, who co-developed the mall, said: “Oceans Mall is distinctive and geared for all tastes, including the sophisticated and affluent shopper. It’s a world-class offering that is positioned among the top three exclusive malls in the country.” It is also not the only South African mega mall that has opened its doors over the last 12 months:
- The 24,000 square metre Boardwalk Mall in Gqeberha (Eastern Cape) also launched in 2022. The mall, part of a precinct upgrade project around the Boardwalk Casino and Entertainment World, boasts 92 stores in addition to entertainment such as a VIP cinema experience. Valued at an estimated R500 million, the development includes a 2 500 sqm Sunpark events and dining arena, as well as a big screen.
- Another Eastern Cape development is the KwaBhaca Mall in Mount Frere. The 19,000 sqm mall, valued at over 200 million rands, is the first development in the province by rural retail owner and asset manager, Exemplar REITail. According to CEO Jason McCormick, the development is part of a formalisation of the township economy trend.
- The 28,000 sqm Merino Mall in Ermelo is the first of its size within a 100-kilometre radius. With future-forward planning, this mall has its own solar photovoltaic plant to power it, avoiding the uncertainty that surrounds the availability of electricity in South Africa while implementing green energy solutions. The architecture pays tribute to the historical background of the area, and the mall’s property developers also cite the needs of the agricultural and mining community, as part of their planning around the development.
- Comparably smaller but impressive nonetheless, is the Mamaila Mall in Limpopo. The 12,500 sqm mall, valued at between 30 and 60 million rands (source: Leads2Business), is expected to serve over 86,000 people, and create a vast number of jobs for the surrounding communities.
Are these new developments signalling the comeback of malls in a post-Covid (yet still highly digitised) consumer environment? Statistics indicate so. According to data from property consultants, Rhode and Associates, more than 300,000 sqm of new leasable retail space would have been completed by the end 2022 in South Africa (source: Reuters).
Additionally, upcoming planned retail mall projects for 2023 include (source: BusinessTech):
- Capital Mall, Gauteng – 60,000 sqm
- Tshakhuma Corner, Limpopo – 10,300 sqm
- Vuwani Mall, Limpopo – 13,500 sqm
- Tshakhuma Corner, Limpopo – 11,500 sqm
- Zeerust Mall, North West – 16,200 sqm
Furthermore, indications are that major retailers will be investing even more into brick-and-mortar establishments in South Africa (a trillion-rand retail market). “Investments in physical stores will still be significantly greater than investment in online,” stated Pick and Pay’s chief transformation officer, David North, recently.
Fashion retailer Mr Price indicates that 66.5% of its capital expenditure for the current financial year will be allocated to stores, with the intention to open 180-200 new stores; while Massmart (now fully owned by US retail giant Walmart through a recently concluded 6.4 billion rand acquisition deal), also indicated that over half of its capital expenditure will go towards new stores and remodelling (source: BusinessTech).
As 2023 kicks off an arguable “post-covid” era (for the moment, as it may be), all signs point to malls making a huge comeback across South Africa. Further projects are already in the pipeline for 2024 and beyond, indicative of major growth overall for the retail and business sector. Much-needed positive news for the South African economy at large.
Main image: The newly refurbished Alfred Mall, which adjoins the Victoria & Alfred Hotel in the Quays District in the heart of the V&A Waterfront, Cape Town.
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