South Africa: Clur Index S2024 ends on a high note for SA's shopping centres
South African retail property has emerged from 2024 in a healthy position which bodes well for the future, according to the Clur Shopping Centre Index.
The index for 2024 and its last quarter showed the year ended on a positive note, with growth in trading densities and rentals, and further entrenchment of the lowest rent-to-sales ratio in five years.
'This reflects the improvement in economic fundamentals during the year,' says Belinda Clur, managing director of Clur International which produces the index.
The index is derived from the Clur Collective, an asset management industry standard and economic indicator, now tracking performance at more than 5.4 million square metres across over 130 shopping centres in South Africa and Namibia.
The platform helps listed and unlisted property funds to understand asset health and optimise returns.
Clur says that unwrapping festive season dynamics from the last quarter show a stronger November than December trading growth position.
'The year also saw a significant shift with smaller centres of less than 50,000 square metres now dominating the growth position of the industry.
'The industry's state of health seems to mirror the current consumer attitude towards wellness. We have, since Covid, seen an evolution from personal wellness to broader community and global wellness, and we now see this extending to a financial and mental wellness position. This is one of the most important and defining trends that needs to be considered in contemporary shopping centre strategy.'
Clur says the 2024 national Index for All Centres closed with an annualised trading density of R40,724 /sqm and y/y% growth of 3.5%. This was a contraction of -1.3% relative to FY '23, but a 0.7% expansion versus Q3 '24. This growth out-performed Dec '24's CPI by 0.5% but under-performed '24's annual CPI by -0.9%.
The December '24 Clur Index for All Centres closed with a base rent/ sqm of R232.65 and y/y% growth of 3.6%. This growth outperformed December 2024's CPI by 0.6%. An annualised rent-to-sales ratio of 6.6% in the full-year Index for All Centres matched the figure for 2023.
'The continuation of this lowest rent-to-sales ratio over five years indicates stability and that the reduced level of risk has been maintained,' says Clur.
Highest trading densities were shown by the two size extremes of super-regional centres, at R50,129/ sqm, and community and smaller centres at R45,698/ sqm. The highest y/y% growth was by small regional centres at 5.6%, followed by community and smaller centres at 3.7% and super-regionals at 3.1%.
Small regional centres were the only segment to expand trading density growth, achieving 2.7% versus FY '23. Super-regional centres had the greatest contraction of -3.1% versus FY '23 with the All Centres Index expanding by 0.5% for the same period.
The Western Cape was the top performer of the three key provinces, with an annualised trading density of R46,691/ sqm and y/y% growth of 4.8%, out-performing Dec '24's CPI by 1.8% and '24's annual CPI by 0.4%.
KwaZulu-Natal showed the next highest trading density of R43,314/ sqm with positive y/y growth of 1.7%, and is the only province to show a growth expansion relative to FY '23 of 4.3%.
Gauteng had the lowest trading density of the three provinces, at R39,136/ sqm, with the second highest y/y growth rate of 4.1%.
'The combined November and December festive season showed better trading density and growth than the rest of 2024,' says Clur.
For these two months the All Centres Index annualised trading density was R55,844/sqm and growth was 6.2% y/y. The rest of the year (Jan – Oct 2024) traded at R37,705/ sqm with 2.8% y/y growth.
Super-regionals saw the highest combined festive season trading density of R71,128/ sqm, while small regional centres had the highest growth rate of 9.2%, expanding by 6.6% relative to 2023.
'Considering November and December performance independently shows that December delivered the higher trading densities, but November delivered the higher growth rates, in contrast to 2023 when December put Black Friday in the shade on both counts.'
The December '24 Clur Index for All Centres closed with an annualised trading density of R65,030/sqm and y/y% growth of 4.5%, with super-regionals hitting the highest trading densities of R84,230/sqm. They were followed by community and smaller centres at R65,165/sqm. However, small regionals had the highest y/y% growth of 9.4%, followed by community and smaller centres at 5.3%. Small regionals outperformed CPI by 6.4% and were the only segment to expand relative to Dec '23 by 4.1%.
KwaZulu-Natal had the highest trading density across the three key provinces of R76,119/sqm for December 2024. It also showed the highest y/y% growth of 8.6%, outperforming CPI by 5.6% and was the only province to expand relative to Dec '23 by 8.6%.
'This reinforces the importance of the December summer holiday tourism season to the economy of the province,' says Clur.
The November '24 Clur Index for All Centres closed with an annualised trading density of R46,755/sqm and y/y% growth of 9.1%. Super-regionals hit the highest trading densities of R58,236/ sqm, followed by community and smaller centres at R50,675/sqm.
Highest growth rates were achieved by community and smaller centres at 10.2%, out-performing CPI by 7.3%. Small regionals had the next highest growth rate of 9.3% , expanding the most by 9.9% relative to Nov '23.
The Western Cape had the highest trading density across the three key provinces, of R53,439/sqm for November 2024. It also had the highest y/y% growth of 10.2%, outperforming CPI by 7.3%.
KwaZulu-Natal had the next highest trading density at R48,727/sqm, and Gauteng the next highest growth rate of 9.3%. KwaZulu Natal showed an exceptional expansion of 16.6% relative to Dec '23.
'This performance bodes well for the shopping centre industry as we embark on the year ahead.'
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