Daily Archives: October 3, 2025

R350 million Somerset Mall upgrade taps into semigration growth

Somerset Mall, owned by South Africa’s largest listed specialised shopping centre Real Estate Investment Trust (REIT), Hyprop Investments, is undergoing a R350 million revamp and expansion that will see phase one of the project open on 20 November 2025, adding over 5,000m² of new retail space and 26 new stores.

The overhaul of the Western Cape shopping centre includes internal upgrades such as retiling and bathroom renovations.

The Western Cape continues to be a major destination for people moving from other South African provinces. This is driven by factors such as better-run municipalities, reduced load-shedding, and a more appealing lifestyle.

Situated in a region with a strong concentration of upper-middle-income households, Somerset West draws over 9 million visitors each year.

Approximately 53 new families per month are moving into Stellenbosch and Somerset West combined, according to 2024 data from Lightstone.

The buyer activity is “notably higher among those aged 50 to 65+,” who are drawn to the area by factors like healthcare facilities and estate living.

Lifestyle estates like Sitari and Sea View Lake remain highly sought after, while foreign buyers from Germany and Switzerland contribute to the luxury segment.

The first phase of this project will welcome 26 new stores to complement the already diverse fashion offering.

The expansion, representing the most significant investment in the mall’s recent history, aims to not only increase capacity but to enhance Somerset Mall’s positioning as the leading retail destination in the region.

The expansion introduces several new retail arrivals, including Safari Collection making its South African debut and Napapijri opening its first Western Cape location.

The Helderberg region will welcome its first Skechers, Anta, Lego, Bella Luna, New Balance, Burnt, Curve Gear, Nicci Boutique and JD Sports stores.

It will also feature South African brands including Bootleggers, Safari Collection, Burnt, Colourbox, Nicci Boutique, Curve Gear and Old School alongside established international names.

The scale and ambition of the expansion project reflect a significant capital investment by Hyprop Investments, the mall’s holding company.

During the construction phase, over 1,200 jobs have been created, including contractors, subcontractors and professional consultants.

Once the new retail space is operational, it is expected to sustain an additional 400 jobs in the long term.

“It was not just about growth in m²,” said Nicholas Oliphant, general manager at Somerset Mall. “We viewed this as a way to contribute meaningfully to local economic development. This project was centred around job creation, commercial inclusion and long-term sustainability.”

During the expansion, construction activities have been confined to the rear of the building, ensuring shoppers and tenants remain unaffected during the upgrade process. Somerset Mall has successfully maintained foot traffic and tenant turnover throughout the project.

Simultaneously, internal improvements are being rolled out across existing space. New floor tiling is currently being installed, and bathroom renovations incorporating green technology features, including waterless urinals and Propel-Air toilets, are underway.

The mall has also added a Rubicon Supercharger Charge Station and opened a newly built car wash.

In July 2026, phase two will introduce Freedom Interactive Park, adding a unique entertainment dimension to the tenant mix. This recreational concept will combine technology and social connection in a high-traffic area.

Global property returns lag

The global economy delivered another year of solid performance in 2024 — and private households reaped the benefits.

According to the Allianz Global Wealth Report 2025, financial assets held by private individuals grew by a robust +8.7%, outpacing even the strong +8.0% increase recorded in the previous year.

By the end of 2024, total financial assets had surged to an all-time high of EUR 269 trillion. However, when measured relative to global economic output, the picture is more nuanced: at 283% of GDP, the asset-to-GDP ratio has returned to 2017 levels.

This apparent plateau is largely the result of inflation, which has “artificially” inflated the GDP denominator, masking the real expansion in household wealth.

The global real estate market showed modest signs of recovery in 2024, with the total value of real estate assets across key countries growing by +3.6%, more than double the +1.7% increase seen in 2023.

Despite the improvement, this performance remains weak in a historical context – with only the post-financial-crisis period in 2012 marking a lower growth rate.

High construction costs and elevated mortgage interest rates continue to dampen the market, making the sluggish pace of growth unsurprising.

Overall, the value of real estate assets in the countries analyzed reached EUR 158 trillion.

Real estate markets exhibited markedly different behaviour across regions:

North America saw a surprisingly sharp rise in prices. Ironically, this is attributed to higher interest rates: with many homeowners holding on to low-rate mortgages, fewer homes are being listed, leading to tight supply and upward price pressure, even amid weak demand.

In Western Europe, this logic doesn’t hold. Markets like Germany and France experienced widespread price declines, reflecting more sensitive buyer behavior and higher construction volumes.

Japan’s market is experiencing a notable turnaround. Prices are rising at their fastest pace in years, signaling a break from the country’s long-standing deflationary environment.

Meanwhile, Australia, New Zealand, and parts of Eastern Europe seem largely immune to interest rate fluctuations, with prices continuing to climb steadily.

Real Estate Returns Lag Behind Financial Assets

When adjusting for inflation and analyzing per capita real estate wealth, long-term trends reveal underwhelming returns — especially when compared to financial assets:

In Japan, the real estate bubble burst of the 1990s and a declining population have resulted in real losses for property owners over the past two decades.

In contrast, North America, Western Europe, and Australia/New Zealand show positive but modest long-term returns, with real estate assets growing slower than financial ones.

For example, in North America, the long-term annual real growth gap between financial and real estate assets stands at 1.5 percentage points.

In Europe and Australasia, it’s just under 0.5 percentage points – consistent with academic findings suggesting that, over the long run, real estate delivers +1% capital gains annually, compared to higher yields from equities.

Switzerland Tops Wealth Ranking

In terms of real estate assets per capita, Switzerland leads the global rankings with an average of EUR 330,800, followed by Australia: EUR 273,440 and the United States: EUR 195,200.

When combining net financial and real estate assets, the picture shifts slightly:

Australia jumps 7 positions in the global wealth rankings. Sweden and Japan each fall sharply, by 6 and 8 places respectively.

Switzerland overtakes the United States for the top overall position, while Germany climbs to 10th place.

In 2024, the financial assets of private households in South Africa rose to EUR 841 billion, marking a year-on-year increase of 9.9%. This corresponds to EUR 13,670 per capita and represents 224.0% of the country’s GDP.

Liabilities, meanwhile, amounted to EUR 153 billion, up 4.1% from the previous year, or EUR 2,480 per capita, equating to 40.7% of GDP.

The real estate sector in 2024 showed signs of stabilising, but it remains caught between structural headwinds and regional divergences.

While certain markets – notably North America and Japan – hint at resilience or recovery, broader global performance is still far from historic highs. As interest rates and construction costs remain elevated, and demographic trends shift, the real estate market appears to be entering a new normal of slower, more volatile growth.