Vukile Property Fund says consumers are visiting malls less frequently, but when they do they spend a lot more money per visit, which has boosted the group’s retail portfolio performance in the year to March.
Vukile owns 33 shopping centres in South Africa, mainly in townships and rural areas. Its South African portfolio is valued at R16.7bn and includes:
- Springs Mall;
- Moruleng Mall;
- Mdantsane City Shopping Centre;
- Giyani Plaza KwaMashu Shopping Centre;
- Ruimsig Shopping Centre; and
- East Rand Mall.
Vukile’s township and rural centres continue to outperform with growth in year-on-year sales at 10.4% and 5.1% respectively and footfall — visits to the mall — rising 0.8% and 2.1% respectively.
Itumeleng Mothibeli, MD of Southern Africa at Vukile, said: “We continue to see an environment of higher spend per head across the portfolio. Consumers are coming to the mall less frequently but when they do they are spending a lot more per visit.”
In the township category, Atlantis Shopping Centre in the Western Cape and Daveyton Mall east of Johannesburg saw spend per head increase by 10.3% and 9.3% respectively. In the rural portfolio, Thavhani Mall in Thohoyandou, Limpopo, grew by 12.4%, while in the urban category Pine Crest in Pinetown, KwaZulu-Natal, experienced a 9.9% increase in spend per head.
We are seeing huge demand from national retailers. Our rural and township portfolios are pretty much fully let. This augurs well for growth
— Itumeleng Mothibeli, MD of Southern Africa at Vukile
“We are seeing huge demand from national retailers,” said Mothibeli. “Our rural and township portfolios are pretty much fully let. This augurs well for growth.”
According to Vukile, month-end and first week of the month account for the majority of footfall at 65%, while 43% of visits are on weekends and Saturdays are the busiest days.
He said grocery recorded a significant increase, while fashion — Vukile’s biggest category — showed a trading density growth of 3% from 0.9%, reflecting a recovery in consumer spending.
“Interesting that fast food showed 10% growth while restaurants growth was flat,” Mothibeli added.
He said Vukile “is positioned in what I would say is the sweet spot of retail in South Africa. I am very happy with how we are positioned.”
Vukile also has 15 shopping centres and retail parks in Spain and five shopping centres in Portugal.
Independent property analyst Keillen Ndlovu said: “In recent years, Vukile has been the most proactive real estate investment trust in seeking new opportunities. This includes its efforts in offshore expansion, capital reallocation, and the issuance of equity and debt through the bond market.”
While the market has focused more on Vukile’s expansion into Spain and Portugal, “its domestic retail portfolio, which is mainly exposed to mid- to low-income markets, including CBDs, townships and rural areas, is performing exceptionally well,” Ndlovu said.
“Their hard work is paying off, as evidenced by their impressive results and upgraded earnings guidance, which exceeds the market average.”
Vukile’s total property assets now exceed R50bn.
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