Real Estate News - Shopping up a storm

Though Analysts Have Repeatedly Voiced Concerns Over The Past Decade That South Africa Is Over-Shopped, Retailers And Property Owners Are Clearly Not Deterred By A Possible Slowdown In Consumers' Appetite For Retail Therapy.

In Fact, A Sentiment Echoed By A Number Of Speakers At The Annual Congress Of The Sa Council Of Shopping Centres (Sacsc) Is That The Consumers' Spending Party Has Just Begun.

Currently, 860 000Sq M Of Shopping Space Is Either Under Construction Or On The Drawing Boards. Sacsc President Chris Lawrence Says That Almost Equals The Amount Of Shopping Space Built Between 2000 And 2004.

A Breakdown Of Figures From Property Research Group Urban Studies Shows That If All Planned Developments Go Ahead, Sa Will See Another 33 Shopping Centres Added To The Market Over The Next Few Years. At Least 11 Of These Centres Are Planned For Gauteng, With Six Exceeding 42 000 Sq M In Greater Jo'burg Alone.

Absa Senior Economist John Loos Believes That There's More To Come. Loos Says The Commercial Construction Boom Is Still In Its Infancy. "It May Be Realistic To Expect That Over The Rest Of The Current Decade We'll See A Commercial Building Upswing That Outstrips Many Expectations ? As Did The Recent Consumer Boom."

Analysts Say That The Retail Development Frenzy Will Continue As Long As National Retailers Continue Their Aggressive Rollout Of New Stores And Expansion Of Existing Ones. For Example, Edcon Plans To Open 125 New Stores In Its Current Financial Year; Massmart Is Looking At 50 New Outlets By 2007; Shoprite Should Have 146 New Stores Operating In The Next 18 Months; Truworths Plans To Open At Least 100 New Identity Stores Over The Next Five Years; And Woolworths Will Add 40 New Stores To Its Existing 264 This Year Alone.

Truworths Deputy Md Tony Taylor Says They've Been Unable To Find 20 000 Sq M In Older, Traditional Shopping Centres. And They'll Need An Additional 35 000 Sq M Of Space Over The Next Five Years For New Identity Stores.

Taylor Dismisses The Argument That Retailers Are Being Reckless In Their Rollout Of New Stores, Saying That Their Businesses Have Significantly Benefited From Their Expansion Drives. He Says That They've Managed To Increase Average Trading Densities In 2005, And Have Proved That New Stores Have Not Merely Cannibalised Spend In Existing Stores.

Urban Studies' Ceo Dirk Prinsloo Argues That Timing And Size ? And No Longer Location ? Are Becoming Crucial To Ensure The Success Of A Centre, With Many Of The New Projects Being At Least 40% To 60% Larger Than They Should Be. - Joan Muller

Article Courtesy Of Finweek: