It is based on a sample of 76 shopping centres from 17 portfolios covering 3.2 million m2 of lettable area at the end of September 2011. The index will be released quarterly.
Stronger than expected retail sales growth in the third quarter of 2011 has helped to maintain the robust performance of South African shopping centres.
Although the turnover growth of shopping centres has recovered from the downturn in 2009 and early 2010, momentum during the recovery has now slowed and dropped below inflation for some types of centres. It is the larger centres where the growth in trading density, which is measured, as turnover per square metre, has been the most muted.
For the year to September 2011, trading density increased by 5.2% for super regional centres, by 5.5% for regional centres and just 3.8% for small regional centres when compared to the previous year.
In contrast, the smaller community and neighbourhood type centres increased their trading densities by 10.2% and 15.0% respectively. These smaller centres generally rely more heavily on necessities such as groceries to drive their sales, compared to larger centres with more specialised tenant types, which are targeted more towards discretionary spending.
Stan Garrun, MD of IPD South Africa, commented, "Mixed signals in the economy - where retail sales are strong yet consumer confidence has dipped significantly in recent months - highlights the need to carefully monitor shopping centre performance. It is important to access the real performance of properties and tenant categories more pointedly, which IPD is doing in this new index series based on the underlying turnovers and densities obtained directly from the shopping centre owners and managers. The Christmas trading period is upon us and the Q4 2011 results due out early in 2012 will reveal critical details about the health of the retail economy, with key implications for centre owners, managers and tenants."
Amanda Stops, GM of the SACS, adds, "The new index has been designed to enhance information sharing in South Africa's retail property sector and provide an important benchmarking tool for the industry. The council is pleased to present this joint initiative to provide a measurement instrument of immense value and insight and ultimately drive informed strategies and decision making for retail property in SA."
