Local mall developer Accelerate is confident about consumers’ appetite for shopping, despite the seismic collapse of shopping malls in the US and the steady rise of online buying in SA.
The e-commerce boom in the US has relegated mega-malls to ghost-town status. Leaving them in the dust are online retailers such as Amazon, which offer a one-stop shopping experience with quick delivery times.
In SA, Takealot has enjoyed robust growth since its merger with Kalahari in 2014 and has a stable of businesses including Takealot.com, Superbalist.com, Mr D Food and Mr D Courier.
But as techno-savvy as South African consumers are becoming, the online shopping market makes up less than 5% of total retail sales, so Accelerate is banking on the growing appetite for traditional malls.
High data costs, limited access to credit and a general nostalgia about the act of physically feeling what you are buying remain forefront to the local consumer.
The revamped Fourways Mall — under construction since August 2015 and due to launch at the end of 2018 — will feature larger retail stores with modern shop fittings all under one roof as opposed to the multiple buildings it had before.
"The development needed to happen at least 10 years ago," said Tony Koupis, the development manager of the Fourways Precinct.
The Accelerate fund had to acquire some of the buildings in the Fourways Mall precinct from Sanlam, however, before embarking on the ambitious task of building a 178,000m² mega-mall.
"Part of what shaped the vision is that, for years, our retail tenants have been asking for larger floor space … while shoppers want to find everything they need under one roof," Koupis said. "Hence we have added 90,000m² of leasable space."
Retailers have seen some recovery following a depressing 2017. Gains were made in most retailer categories in the last quarter.
The biggest jump was in household furniture, appliances and equipment, up 9.2% year on year.
Textiles, clothing and footwear continued a strong performance, with growth of 6.5% year on year, while other retailers climbed 5.8%.
"We believe retail sales will continue to perform at these levels through 2018 as credit growth picks up," said FNB economist Jason Muscat.
"In broad terms, SA has too many malls in some saturated areas like Sandton and Rosebank," said Ron Klipin, an analyst at Cratos Wealth.
"But Fourways is a great node, with upwardly mobile professionals that have spending power."
The immediate catchment area around the mall is occupied by suburban dwellings, mostly LSM 6-9 consumers. It is also flanked by township areas such as Diepsloot and Cosmo City, which are populated mainly by lower-income consumers.
"We want to serve all surrounding communities with all their diverse needs and budgets," Koupis said. "The key is taking advantage of the density to get the right returns."
The Fourways node has multiple public transport routes such as William Nicole Drive and Malibongwe Drive, bus rapid transport, Lanseria Airport and the planned Gautrain station. But to really engage consumers, mall managers are forced to be innovative, with some bringing in pop-up entertainment to draw in foot traffic.
Gateway Theatre of Shopping in KwaZulu-Natal set up Snow World with ice slides and snow ramps in the old Stuttafords premises — an activation that attracted more than 55,000 shoppers.
Conversely, Kidzania, the newest attraction at Fourways Mall, is a permanent feature. It is projected to increase foot traffic and extend time families spend at the mall. For anything from R250 to R300 a head, children can spend up to four hours in the interactive, scaled-down replica of the real world, complete with streets, buildings and a functioning economy.
"The fundamental thing is creating a Fourways for the next generation," said Koupis. This means creating a shopping node that caters for the whole family and future-proofing it to serve a diverse population for the next few years to come.
The Mall of Africa has also offered Accelerate some invaluable lessons. Once all the hype around its launch faded, the mix of high-end shops and taxi-route wars have seen it underperform expectations.
The Mall of Africa has attempted to counter some of the effect with sprouts of innovation. For example, they brought the beach to Waterfall for two weeks in December, attracting at least 17,000 families.
While the Fourways node has the potential to satisfy consumer needs, its expansion may also achieve the investment return that Accelerate wants.
