Clur Index: Small retail centres lead growth stakes in South Africa

Zawya

26-05-2025

According to the latest Clur Shopping Centre Index, community and smaller retail centres led the growth stakes in the first quarter of 2025.
Along with these centres, super-regional malls and the Western Cape were top performers for the quarter, said Belinda Clur, managing director of Clur International, which produces the index.
'The outperformance of community and smaller centres points to a shift in the consumer value system,' said Clur.
She positions the market as a Belief Economy, with the Attention Economy fading out.
'Meaningful values are now prioritised over excessive exposure, and trusted emotional and human connection is the new currency. This is a critical backdrop for future shopping centre and business strategies.
'The national Clur Index for Q1 outperformed March 2025 CPI and saw growth relative to December 2024, in both annualised trading density and base rentals,' she said.
'The rent-to-sales ratio maintained its lowest level over five years, indicating continued stability and reduced market risk.'
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.
'Over the quarter, all measured shopping centre segments outperformed Mar '25 CPI,' said Clur.
'But it was the community and smaller centres that showed the highest y/y% growth rate of 5.1%, beating CPI by 2.4% and expanding by 1.4% relative to Dec '24.
Small regional centres followed at 3.6%, beating CPI by 0.9%. Regional centres showed the next highest growth expansion of 0.9% relative to Dec '24.
'The national Clur Index closed Q1 '25 with an annualised trading density of R41,162/sqm and y/y% growth of 3.4%. This outperformed Mar '25 CPI by 0.7% and showed an expansion of 0.4% relative to the 2024 year. Super regional centres showed the highest trading density of R50,440/sqm, followed by community and smaller centres at R46,564/sqm.'
In rental performance, community and smaller centres showed the highest y/y% growth rate of 5.0%, beating CPI by 2.3%. Regional centres followed at 4.9%, beating CPI by 2.2%.
The national Clur Index for Base Rent closed Q1 '25 at R233.10/ sqm and y/y% growth of 3.4%. This outperformed Mar '25 CPI by 0.7% and showed an expansion of 0.1% relative to Dec '24.
Super regional centres showed the highest rentals of R314.23/sqm, followed by regional centres at R227.48/sqm. Super regional centre rentals grew by 2.6% y/y, underperforming CPI by -0.1%.
Clur said the Western Cape showed the strongest rental performance of the key three provinces of R256.22/sqm and y/y% growth of 6.2%, beating CPI by 3.5%. KwaZulu-Natal was second, at R238.53/sqm, growing by 2.5% y/y. Gauteng's y/y% growth rate was 2.4%, underpinned by a rental of R233.17/sqm.
The national Clur Index Base Rent to Sales ratio closed Q1 '25 at 6.6% and stable y/y% growth.
'The market has not deviated from this level since late '23, indicating an ongoing position of stability and reduced market risk against the volatility of the last five years,' said Clur.
Super regional centres showed the highest rent to sales ratio of 7.2%, whereas community and smaller centres showed the lowest level of 4.8%.
The Western Cape showed the lowest rent to sales ratio of the key three provinces at 6.1%, with Gauteng showing the highest at 6.9%.
Clur says: 'Trust, social connection and greater good are key elements of the new Belief Economy. These elements are evident in the growing theme of social impact retail in South Africa, which takes products and services to underserved communities.
'The Belief Economy is also evidenced through substantial growth and interest in the pre-loved second-hand and refurbished market, storytelling, the need for transparent provenance of product supply chains, as well as plant-based and organic segments becoming more mainstream shopper categories.'
Clur said the Attention Economy was based on seduction via aggressive broad-based promotional activity on social media platforms that was mostly unashamedly brash and often dishonest.
'However, consumers have outgrown the superficial, 'in your face' quality that this embodied and now crave something real. The associated 'less is more' approach of the Belief Economy ties in with new thinking on luxury now being defined by peace and minimalism.
'Integrity and well-intentioned principles are cornerstones of a new language that resonates with consumers. In this case, a deep emotional connection is essential to attracting consumers and stimulating their desire to engage and spend.
'Additionally, there is a focus on global wellness and philanthropy. Strategies that stir emotional resonance through important themes such as climate change, empathy, animal welfare, inclusivity, ethics, responsible tech and circular economies are more likely to be successful in the Belief Economy, as emotional and altruistic touchpoints inspire change.
'This desired consumer sentiment seeks human medicine via physical, social, and community interactions. Therefore, shopping centre strategies should focus on human connection as an overarching theme.'
Clur said this emotional and human currency was also based on a growing loneliness pandemic with global rising rates of single person dwellings and dropping fertility rates. Within this context, whilst social media platforms sell connection, this was often a mirage without substance.
'The Belief Economy further embodies a well-intentioned future skills set including adaptability, critical thinking, leading with impact, emotional intelligence, tactical ideas and solutions, personal development and tech savviness. All of these are key themes that shopping centres and businesses need to consider.'
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