Story audio is generated using AI
Gauteng shopping centres and the country’s largest malls emerged as the strongest performers in the first quarter of 2026, signalling a shift in retail property growth patterns as the sector continued to show resilience despite pressure on consumers.According to the Clur shopping centre index, superregional centres recorded the highest year-on-year trading density growth of 5.6%, marking the first time since November 2024 that they outperformed community and smaller centres. Regional malls followed closely with growth of 5.4%.The broader sector remained resilient. National trading-density growth came in at 5.2%, ahead of inflation, while rental growth continued to outpace consumer prices.The shift is consistent with the South African Property Owners Association’s (Sapoa’s) latest Retail Trends Report, which points to larger destination malls increasing their share of discretionary spending. While apparel sales remain muted in smaller centres, health and beauty retailers continue to outperform within superregional malls.The macroeconomic backdrop remained subdued but relatively stable in the first quarter of the year, though rising geopolitical tension involving Iran and renewed volatility in global oil markets have introduced upside risks to inflation and consumer costs, the group said.“The first quarter reflected a meaningful shift in growth across both shopping centre formats and provinces,” said Clur International managing director Belinda Clur. Gauteng overtook the Western Cape as the fastest-growing retail property market, recording trading density growth of 5.6% year on year. The Western Cape followed at 5.2% while KwaZulu-Natal posted growth of 4.4%.Despite losing the top growth position, the Western Cape remained the leader in trading density volumes at R50,262/m², ahead of KwaZulu-Natal’s R45,278 and Gauteng’s R41,842.Large destination malls continued to dominate actual trading density volumes, with superregional centres generating R53,225/m². Community and smaller centres remained competitive at R49,131.Rental fundamentals also remained robust. The national base rent-to-sales ratio held steady at 6.6%, a level maintained since mid-2024, while base rentals increased 5.5% year on year, comfortably ahead of inflation.Superregional centres achieved the strongest rental growth at 5.9% while KwaZulu-Natal led provincial rental growth at 7.1%.Cost-of-living challengesClur said the sector’s resilience is being supported by steady trading density growth and stable rental metrics, even as consumers face rising living costs and a challenging global environment.She said consumers are increasingly prioritising value, trust and authenticity in their spending decisions, creating new pressures and opportunities for retailers seeking to maintain customer loyalty. “Ongoing hard times, further exacerbated by the Iran war and associated energy and living cost increases, are central to this consumer position in the broader realm of global geopolitical tension. An emphasis on these elements is expected to deepen significantly over time,” Clur said. Redefine, which owns large malls, recently reported that its annual trading density increased to R37,200/m² from R35,420/m² in the half-year ended February 2025, with rent-to-turnover at 7.7% for the six months to February.“Our retail strategy is intentionally built around resilience, relevance and results. By strengthening essential categories, expanding experiential offerings and investing in targeted reconfigurations, we are seeing measurable improvements in trading performance and tenant retention across the portfolio. The stability in our rent-to-turnover ratios confirms that the interventions we’ve made are working, even in a constrained consumer environment,” said Redefine Properties retail asset manager Nashil Chotoki.
