Refinitiv Newscasts - S. Africa's shoppers stick with bricks over clicks

NNN REIT

29/06/2022 16:25

Click the following link to watch video: https://share.newscasts.refinitiv.com/link?entryId=1_95vp5ba5&referenceId=tag:reuters.com,2022:newsml_OV833829062022RP1_930&pageId=RefinitivNewscasts
Source: Reuters

Description: Despite predictions that the COVID-19 pandemic would cause a
decline in traditional retail, many property developers are pushing ahead with
bricks-and-mortar shopping malls in South Africa where e-commerce has not yet
gained a significant foothold. David Doyle has more.
Short Link: https://refini.tv/3bAYtyS

Video Transcript:

In Johannesburg, the finishing touches are being given to the Kwena Square
shopping complex. Accepted wisdom may be that the global health crisis has
contributed to a worldwide apocalypse for traditional retail. But that doesn't
appear to be the case in South Africa. Nashil Chotoki is National Retail Asset
Manager at Redefine Properties, which opens the $13 million Kwena Square on
Friday.
 
Certainly, I think in light of growth of turnouts and uptick in foot count,
the retailers expansion into new stores. I don't see the mall as being dead, I
think it's still very relevant to the consumer.

Many industry players and experts saw the strict lockdowns in Africa's most
advanced economy as an opportunity for ecommerce. But South Africa's $62
billion retail market has evolved differently to many other parts of the
world. High crime rates and a scarcity of safe public spaces have historically
driven shoppers into commercial complexes, complete with armed guards and
restricted access. And though online sales have tripled in South Africa over
the past two years, they still only make up 5% of the total. That compares
with 28% in Britain, 25% in China, and 14% in the United States. One reason is
that high data costs deter many lower-income people from online retail. But
Public Relations Manager Gomotsegang Motswatswe, one of those returning to
South Africa's malls, says it's about more than shopping. 

We still want to be out there as people and socialize. Even if you not talking
to people per se, you still want to go and just do stuff, just buy and look at
stuff.

So, while traditional stores and malls have been closing in countries like the
UK and the US, in South Africa, the reverse is true. According to property
consultants Rode & Associates, around 4 million square feet of new leasable
retail space was brought to the market over 2020 and 2021. This year alone,
it's expected to be 3.2 million square feet, as commercial property developers
chase the money in a country where shoppers continue to prefer bricks over
clicks