RETAIL: Retail Industry Moving to More Positive Territory Says Broll
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South Africa’s retail sector is demonstrating a cautiously optimistic trend accordingly to leading South African property group Broll.
“Retail sales are following a similar trend to 2009, which leads us to conclude that festive season trade will be similar to last year, albeit at a slightly higher growth rate of between 10 and 12 percent,” notes Broll Group Research and Marketing Manager Sanett Uys following a detailed study of Broll-managed shopping centres larger than 20,000sqm.
The star performing merchandise categories in Q3/2010 include top-performer catalogue stores, featuring the likes of Verimark and Glomail, which grew sales in excess of 40%. This was followed by cinemas, hardware stores, car services and repairs and junior department stores sized between 2,500sqm and 4,999sqm.
The company’s latest research, published in the Broll Retail Barometer Review of Q3/2010 indicates that the South African retail property market is also entering the recovery phase, reflecting the improved retail performance.
“Globally the retail market has entered the recovery phase and South Africa is no exception,” says Uys.
According to Uys, highlights in the current market include nominal retail sales figures which show year-on-year growth of approximately 7% in September 2010, declining retail vacancy rates in prime areas, increased consumer confidence levels and modest growth in gross retail rentals.
“Demand for retail property has started to increase, but at a slow pace, and the existing oversupply of retail space is being absorbed gradually,” says Uys. “Because little or no new stock is coming online in most major areas, this trend is likely to continue.” Research indicates that new supply coming online in 2011 is expected at approximately 287,000sqm and 120,000sqm in 2012.
Uys reveals that declining high street rentals for prime space in Cape Town, Durban and Johannesburg all stabilised during the first three quarters of 2010 and are now moving up slightly. “Prime regional shopping centres are likely to follow this pattern during the first six-months of 2011, correcting the downward trend which has prevailed since early 2009,” says Uys.
BROLL is a multi-disciplinary property services company with over 35 years experience in the property industry. Its services include property, shopping centre and facilities management as well as sales, leasing, valuations, retail consultancy, corporate real estate advisory services, research and investment services to the retail, commercial, industrial and investment markets. Broll is part of the international CB Richard Ellis network.
Business News Sector Tags: Property| Retail|