People have less disposable income. Self-learning robots and algorithms are taking over menial jobs once held by a human being. Large informal business sectors across Africa are giving malls a run for their money. These are, indeed, anxious times for the shopping centre industry. Its greatest purpose today is to figure out how to evolve to these dynamic changes.
Shopping malls in Africa
When it comes to shopping malls in Africa, Broll’s evaluation and advisory department has a considerable reach. We stretch from South Africa, to Ghana, Nigeria and even Kenya. The demand is increasing because these countries are importing the South African shopping mall model.
However the South African model does not always work. In Kenya, it has been adopted seamlessly, but in Nigeria less successfully so. They have a bigger, perhaps more trusted, informal business sector. It is said that the 24 kilometre stretch of road leading to the Murtala Muhammed International Airport is the longest shopping centre in the world. You can place your order on the motorway and seven kilometres down the road, it will be delivered to you. The goods are cheaper and the products are about the same.
Online shopping increasing
At the same time, online shopping is becoming bigger. In the UK 30 percent of all sales are done online, which means 30 percent less sales in shopping centres. As a consequence, shops have lower turnover, malls have to reduce rent and there is lower demand for space. This is partly because people have less disposable income. The same is happening in South Africa, albeit, on a smaller scale, but there are signs of this trend gaining traction.
Shopping centre design is evolving
Shopping centres are moving away from the big box concept and opting for more specialist retailers such as smaller clothing boutiques. The MARC in Sandton is a great example, where numerous smaller boutiques nestle between few large tenants. As a result, rental models are changing, shifting rental per square metre to towards turnover rent.
People are looking for specialised smaller outlets instead of department stores. Specialised stores offer convenience and unmatched personal service. You will not have to deal with the Saturday afternoon part-time temp any longer. Instead, you get the dedicated salesperson who knows the brand intimately.
The value of evaluation
All of these doubts and anxieties about the market only make evaluation an increasingly crucial part of purchasing property. No longer can it be seen as a grudge purchase.
There are two major differentiators that make Broll’s evaluation service one of the best in the world. The first is that we possess almost forty-five years of market research and a vast knowledge base in South Africa and the rest of the continent.
The second differentiator is that our evaluations are conducted according to international standards particularly the International Valuation Standards Council and the Royal Institution of Chartered Surveyors.
In addition, we have recently affiliated with American giant Cushman & Wakefield, whereby we combine our well-established operations and market-leading track record of occupier services across Africa with their global reach. This will allow for the optimisation of Broll’s expansive knowledge of the African markets with the weight and expertise of a global player. Evolving shopping landscape echoes the anxieties of our age.